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Category: Banking

  • MIL-OSI USA: ICYMI: On Senate Floor, Warren Opposes Treasury Nominee for Backing Trump Billionaire Agenda

    US Senate News:

    Source: United States Senator for Massachusetts – Elizabeth Warren

    January 27, 2025

    “[B]illionaires dominate the American economy, and Republicans plan to give them more tax breaks…And Mr. Bessent is another billionaire ready to do the hard work of cutting taxes for every billionaire in America, himself included.” 

    “Mr. Bessent has been an advocate for deregulating Wall Street and letting the Big Banks load up on risk…[an] approach [that] brought our economy to its knees in 2008…Trump wants to run that same economic play and Mr. Bessent is the guy he’s picked to do it.”

    Video of Remarks (YouTube) 

    Washington, D.C. – U.S. Senator Elizabeth Warren (D-Mass.), Ranking Member of the Senate Committee on Banking, Housing, and Urban Affairs, delivered remarks on the floor of the U.S. Senate opposing the nomination of Mr. Scott Bessent for Secretary of the Treasury. Mr. Bessent’s views – including support for policies that compromise the stability of our financial system and support for tax policies that help billionaires instead of working families – have raised deep concerns for Senator Warren. 

    Remarks from Senator Elizabeth Warren
    As Delivered
    January 27, 2025

    Madam President, I rise today in opposition of Scott Bessent to be the next Treasury Secretary and in support of tens of millions of working families who need a government on their side.

    The Treasury Secretary is one of the President’s top economic advisors. He has the power to lower costs for hard-working people—or to give billionaires another break. 

    Now, Mr. Bessent has a long history as an investment manager helping rich clients get even richer. In fact, helping rich people get richer has been a profitable business for him. Mr. Bessent is now a billionaire himself. He owns not one, but two, multi-million dollar mansions, including one in the Bahamas, and has hundreds of millions in investments. Now, he’s spent a lot of money, but he’s saved money in one area:  he hasn’t paid the taxes he owes. According to an analysis from the Congressional tax experts, Mr. Bessent has refused to pay $2 million in taxes that he owed on his hedge fund earnings just in the past 3 years. And Mr. Bessent has no demonstrated track record of fighting to make life better or more affordable for working people.

    So let’s start with some of Trump’s economic plans that Mr. Bessent would be in charge of advancing. 

    Right now, Republicans in the White House and in Congress are working through their plans to extend tax breaks for billionaires and giant corporations – paid for in part with major cuts to health care.  

    In plain English, Republicans are hoping you won’t notice major budget cuts for nursing homes that take care of your grandpa or the cuts in school lunches for poor kids. Move grandpa out of the nursing home and let the little kids go hungry in order to make sure a tiny handful of billionaires get a few more truckloads of cash from Uncle Sam. 

    There’s a truth no one can escape: Someone has to pay to run this country. Folks like Scott Bessent think the burden should be just a little heavier on working people because billionaires like him are smarter than everyone else. One place or the other, someone has to pay. 

    So during his hearing, I asked Mr. Bessent about those cuts for billionaires. I asked if there were any billionaires already rich enough that they just didn’t need another tax cut. 

    He said, well, that it was unwise to single out anyone, not even billionaires. 

    You wouldn’t want to single out a billionaire like Jeff Bezos who pays a lower tax rate than a Boston public school teacher?

    You wouldn’t want to single out a billionaire like Mark Zuckerberg whose company Meta paid a tax rate of just 11.5-percent in 2023 despite making nearly $40 billion in profits?

    You wouldn’t want to single out a billionaire like Elon Musk who’s more focused on flying to Mars than making life better for working families here on Earth?

    Those billionaires had better seats at Donald Trump’s inauguration than Trump’s own cabinet nominees.

    Those billionaires dominate the American economy, and Republicans plan to give them more tax breaks. This is the payout for Trump’s quote ‘rich as hell donors.’ And Mr. Bessent is another billionaire ready to do the hard work of cutting taxes for every billionaire in America, himself included.

    The top economic issue today is how do we lower costs for families and build an economy that works, not just for the wealthy and well-connected, but an economy that works for everyone. 

    I’m hammering out plans to make it a little easier for families to be able to pay their bills, to buy a home, and to build some financial security. 

    Trump’s tax breaks for billionaires is the same old Republican playbook of trickle down economics. Help the rich get richer and leave everyone else behind. 

    But that’s not the Trump administration’s only bad economic idea.

    Mr. Bessent has been an advocate for deregulating Wall Street and letting the Big Banks load up on risk. 

    Deregulate Wall Street. Yeah, a lot of people remember how that approach brought our economy to its knees in 2008. People who remember include millions of people who lost their homes. The millions who lost their jobs. The millions who lost their savings. And now, once again, Trump wants to run that same economic play and Mr. Bessent is the guy he’s picked to do it.  

    We don’t need less oversight of the giant banks and Wall Street movers and shakers. Risk is building in the system. 

    The too-big-to-fail banks are quietly taking on riskier investments. 

    The shadowy private credit market has loaded up on highly leveraged loans. 

    And after waves of catastrophic losses, the insurance industry is facing a reckoning that even climate-change deniers can’t ignore. 

    Without significant changes, another financial crash is coming.

    As we learned, those big crashes fall hardest on hard working people who are just trying to make a living.  A billionaire willing to roll along on deregulation poses a threat to the economic well-being of every American. And a billionaire who supports more tax cuts for every single billionaire in America is not someone who is watching out for hard working families.

    For me, this is simple.  

    I’m ready to work together with President Trump’s team wherever we agree to help families, but I’m also ready to fight like hell when Republicans pursue economic policies that load up the risk in our financial system or tax policies that mostly benefit billionaires. 

    I will vote NO on Mr. Bessent to be the next Secretary of the Treasury, and I urge my colleagues to do the same. 

    Thank you, Madam President, and I suggest the absence of a quorum. 

    MIL OSI USA News –

  • MIL-OSI New Zealand: Opposing Govt Policy – Hear our voice PM – the PSA’s campaign against asset sales begins today

    Source: PSA

    The PSA firmly rejects any return to selling state assets following today’s comments from the Prime Minister.
    Christopher Luxon said National may seek a mandate for asset sales at the next election. That comes days after ACT Leader David Seymour floated the prospect of privatisation of public health and other public services.
    “Not content with stripping the guts out of the public service, now we have a Prime Minister floating selling state assets – it’s a return to the failed policies of the past,” said Fleur Fitzsimons, Acting National Secretary for the Public Service Association for Te Pūkenga Here Tikanga Mahi.
    “If the Government thinks selling state assets will drive economic growth, then the public should be worried.
    “Have we not learnt from the past? Our history is littered with failed privatisations which required expensive bail outs and buy backs by taxpayers – remember the failures of Kiwi Rail, Air New Zealand and the Bank of New Zealand.
    “The PSA doubts the public’s mood for asset sales has shifted since the 2013 citizens initiated referendum where two thirds of voters rejected asset sales.
    “Asset sales are just a short-term sugar hit, and the public will be worse off. This is not simply a ‘recycling of assets’ as the PM puts it, but a loss of ownership and control. It’s wrong.
    “Let’s not repeat the mistakes of the past and keep the state’s silver in public hands. The PSA will be making its opposition to any return to the failed asset sales agenda of the past loud and clear.”
    The Public Service Association Te Pūkenga Here Tikanga Mahi is Aotearoa New Zealand’s largest trade union, representing and supporting more than 95,000 workers across central government, state-owned enterprises, local councils, health boards and community groups.

    MIL OSI New Zealand News –

  • MIL-OSI USA: New Report Highlights Transformational First Year of Colorado Universal Preschool, Reaching Nearly 70% of Eligible Four-Year-Olds

    Source: US State of Colorado

    DENVER — The Colorado Universal Preschool Annual Report, submitted to the Colorado Legislature as part of SMART Act requirements, highlights how the program’s inaugural year transformed early childhood education by providing high-quality, voluntary preschool to every child in the year before kindergarten. Read the report here. 

    “Free preschool is saving Colorado families an average of $6,100 every single year and helping our kids get the best possible start in life. This report shows that we are reaching the vast majority of young learners and we are committed to continue serving even more students,” said Governor Jared Polis. 

    In its first year, Colorado Universal Preschool served 43,479 children, reaching nearly 69% of the state’s eligible four-year-olds—a milestone that positions Colorado among the top states for preschool access nationwide. 

    “This success underscores Colorado’s commitment to children and families,” said Dr. Lisa Roy, Executive Director of CDEC. “Universal preschool is strengthening families and providing a solid foundation for our youngest learners to thrive.” 

    Key Wins for Colorado Families Enrolled in Colorado Universal Preschool in 2023-24:

    • Lowering Families’ Costs: The program saved families an average of $6,100 annually on preschool expenses, providing critical financial relief for other costs. 
    • Expanding Family Choice: With more than 1,900 providers statewide, families had the flexibility to choose from community-based, school-based, and home-based preschool settings. 
    • Serving Diverse Needs: Nearly 50% of children came from low-income households, with over 11,000 children also classified as being multilingual, experiencing ‘homelessness’, or having a disability. 
    • Strengthening the Sector: The program distributed $239.4 million to providers, enhancing sustainability and incentivizing sector growth. 

    “The impact of Colorado’s Universal Preschool program is profound,” said Michael Gaal, Superintendent of Colorado Springs School District 11. “District 11 is proud to be the largest provider of Universal Preschool serving more than 1000 preschoolers in El Paso County, with 31 of our 33 elementary schools offering the program. By investing in early childhood education, Colorado is setting the foundation for success. This program will not only benefit our students today, but its impact will continue to be felt for years to come.” 

    The report outlines ongoing challenges, including provider shortages in certain regions and workforce gaps. In response, the program has expanded full-day preschool (30 hours/week) for children in poverty and is launching a Provider Resource Bank to improve quality and accessibility statewide.

     “Colorado Universal Preschool is building a national model of excellence while addressing local needs,” Dr. Roy added. “We look forward to partnering with families, providers, and communities to create even greater opportunities for Colorado’s children.” 

    Apply Now for The 2025-26 School Year Submit an application by February 5, 2025 to be included in the first family-to-provider matching round. Learn more, explore preschool options, and apply online at UPK.Colorado.Gov. 

    Assistance is available: 

    💻Visit: Help.Upk.Colorado.Gov 

    📧Email: universalpreschool@state.co.us 

    📲Call: 303-866-5223 (Monday–Friday, 8 a.m.–8 p.m. MST). Interpreters available in 100+ languages.

    MIL OSI USA News –

  • MIL-OSI: SOUTHERN MISSOURI BANCORP REPORTS PRELIMINARY RESULTS FOR SECOND QUARTER OF FISCAL 2025; DECLARES QUARTERLY DIVIDEND OF $0.23 PER COMMON SHARE; CONFERENCE CALL SCHEDULED FOR TUESDAY, JANUARY 28, AT 9:30 AM CENTRAL TIME

    Source: GlobeNewswire (MIL-OSI)

    Poplar Bluff, Missouri, Jan. 27, 2025 (GLOBE NEWSWIRE) —

    Southern Missouri Bancorp, Inc. (“Company”) (NASDAQ: SMBC), the parent corporation of Southern Bank (“Bank”), today announced preliminary net income for the second quarter of fiscal 2025 of $14.7 million, an increase of $2.5 million, or 20.2%, as compared to the same period of the prior fiscal year. The increase was attributable to increases in net interest income and noninterest income, partially offset by increases in noninterest expense, income taxes, and provision for credit losses. Preliminary net income was $1.30 per fully diluted common share for the second quarter of fiscal 2025, an increase of $0.23 as compared to the $1.07 per fully diluted common share reported for the same period of the prior fiscal year.

    Highlights for the second quarter of fiscal 2025:

    • Earnings per common share (diluted) were $1.30, up $0.23, or 21.5%, as compared to the same quarter a year ago, and up $0.20, or 18.2% from the first quarter of fiscal 2025, the linked quarter.
    • Annualized return on average assets (“ROAA”) was 1.21%, while annualized return on average common equity was 11.5%, as compared to 1.07% and 10.6%, respectively, in the same quarter a year ago, and 1.07% and 10.0%, respectively, in the first quarter of fiscal 2025, the linked quarter.
    • Net interest margin for the quarter was 3.36%, as compared to 3.25% reported for the year ago period, and 3.37% reported for the first quarter of fiscal 2025, the linked quarter. Net interest income increased $3.7 million, or 10.6% compared to the same quarter a year ago, and increased $1.5 million, or 4.0%, from the first quarter of fiscal 2025, the linked quarter.
    • Noninterest income was up 21.7% for the quarter, as compared to the same quarter a year ago, primarily as a result of losses realized on sale of available-for-sale (AFS) securities in the prior comparable quarter, and down 4.3% from the first quarter of fiscal 2025, the linked quarter.
    • Gross loan balances as of December 31, 2024, increased by $60.5 million, or 1.5%, as compared to September 30, 2024, and by $295.1 million, or 7.9%, as compared to December 31, 2023.
    • Cash equivalent balances as of December 31, 2024, increased by $70.5 million as compared to September 30, 2024, but decreased by $71.0 million as compared to December 31, 2023.
    • Deposit balances increased by $170.5 million, or 4.2%, as compared to September 30, 2024, and by $225.1 million, or 5.6%, as compared to December 31, 2023. The increase compared to the linked quarter was primarily due to seasonal inflows of deposits from agricultural and public unit depositors.
    • Tangible book value per share was $38.91, having increased by $4.26, or 12.3%, as compared to December 31, 2023.
    • The current period effective tax rate was 23.7%, as compared to 20.6% in the same quarter of the prior fiscal year. The effective tax rate for the December 31, 2024, quarter was elevated due a $380,000 adjustment of tax accruals attributable to completed merger activity.

    Dividend Declared:

    The Board of Directors, on January 21, 2025, declared a quarterly cash dividend on common stock of $0.23, payable February 28, 2025, to stockholders of record at the close of business on February 14, 2025, marking the 123rd consecutive quarterly dividend since the inception of the Company. The Board of Directors and management believe the payment of a quarterly cash dividend enhances stockholder value and demonstrates our commitment to and confidence in our future prospects.

    Conference Call:

    The Company will host a conference call to review the information provided in this press release on Tuesday, January 28, 2025, at 9:30 a.m., central time. The call will be available live to interested parties by calling 1-833-470-1428 in the United States and from all other locations. Participants should use participant access code 230612. Telephone playback will be available beginning one hour following the conclusion of the call through February 1, 2025. The playback may be accessed by dialing 1-866-813-9403, and using the conference passcode 279309.

    Balance Sheet Summary:

    The Company experienced balance sheet growth in the first six months of fiscal 2025, with total assets of $4.9 billion at December 31, 2024, reflecting an increase of $303.4 million, or 6.6%, as compared to June 30, 2024. Growth primarily reflected increases in net loans receivable, cash and cash equivalents, and AFS securities.

    Cash and cash equivalents were a combined $146.1 million at December 31, 2024, an increase of $84.7 million, or 137.9%, as compared to June 30, 2024. The increase was primarily the result of strong deposit generation that outpaced loan growth and AFS securities purchases during the period. AFS securities were $468.1 million at December 31, 2024, up $40.2 million, or 9.4%, as compared to June 30, 2024.

    Loans, net of the allowance for credit losses (ACL), were $4.0 billion at December 31, 2024, increasing by $175.0 million, or 4.6%, as compared to June 30, 2024. The Company noted growth primarily in drawn construction, 1-4 family residential, commercial and industrial, agricultural production loan draws, owner occupied commercial real estate, and agriculture real estate loan balances. This was somewhat offset by a decrease in loans secured by non-owner occupied commercial real estate, multi-family property, and consumer loans. The table below illustrates changes in loan balances by type over recent periods:

                                             
    Summary Loan Data as of:      Dec. 31,        Sep. 30,        June 30,        Mar. 31,        Dec. 31,  
       (dollars in thousands)   2024     2024     2024     2024     2023  
                                             
    1-4 residential real estate   $ 967,196     $ 942,916     $ 925,397     $ 903,371     $ 893,940  
    Non-owner occupied commercial real estate     882,484       903,678       899,770       898,911       863,426  
    Owner occupied commercial real estate     435,392       438,030       427,476       412,958       403,109  
    Multi-family real estate     376,081       371,177       384,564       417,106       380,632  
    Construction and land development     393,388       351,481       290,541       268,315       298,290  
    Agriculture real estate     239,912       239,787       232,520       233,853       238,093  
    Total loans secured by real estate     3,294,453       3,247,069       3,160,268       3,134,514       3,077,490  
                                             
    Commercial and industrial     484,799       457,018       450,147       436,093       443,532  
    Agriculture production     188,284       200,215       175,968       139,533       146,254  
    Consumer     56,017       58,735       59,671       56,506       57,771  
    All other loans     3,628       3,699       3,981       4,799       7,106  
    Total loans     4,027,181       3,966,736       3,850,035       3,771,445       3,732,153  
                                             
    Deferred loan fees, net     (202 )      (218 )     (232 )     (251 )     (263 )
    Gross loans     4,026,979       3,966,518       3,849,803       3,771,194       3,731,890  
    Allowance for credit losses     (54,740 )     (54,437 )     (52,516 )      (51,336 )     (50,084 )
    Net loans   $ 3,972,239     $ 3,912,081     $ 3,797,287     $ 3,719,858     $ 3,681,806  
       

    Loans anticipated to fund in the next 90 days totaled $172.5 million at December 31, 2024, as compared to $168.0 million at September 30, 2024, and $140.5 million at December 31, 2023.

    The Bank’s concentration in non-owner occupied commercial real estate, as defined for regulatory purposes, is estimated at 316.9% of Tier 1 capital and ACL at December 31, 2024, as compared to 317.5% as of June 30, 2024, with these loans representing 41.0% of gross loans at December 31, 2024. Multi-family residential real estate, hospitality (hotels/restaurants), care facilities, retail stand-alone, and strip centers are the most common collateral types within the non-owner occupied commercial real estate loan portfolio. The multi-family residential real estate loan portfolio commonly includes loans collateralized by properties currently in the low-income housing tax credit (LIHTC) program or that have exited the program. The hospitality and retail stand-alone segments include primarily franchised businesses; care facilities consisting mainly of skilled nursing and assisted living centers; and strip centers, which can be defined as non-mall shopping centers with a variety of tenants. Non-owner-occupied office property types included 33 loans totaling $24.2 million, or 0.60% of gross loans at December 31, 2024, none of which were adversely classified, and are generally comprised of smaller spaces with diverse tenants. The Company continues to monitor its commercial real estate concentration and the individual segments closely.

    Nonperforming loans (NPLs) were $8.3 million, or 0.21% of gross loans, at December 31, 2024, as compared to $6.7 million, or 0.17% of gross loans at June 30, 2024. Nonperforming assets (NPAs) were $10.8 million, or 0.22% of total assets, at December 31, 2024, as compared to $10.6 million, or 0.23% of total assets, at June 30, 2024. The rise in the total dollar of NPAs reflects an increase in NPLs, which was largely offset by a reduction in other real estate owned due to property sales. The increase in NPLs was primarily attributable to the addition of three unrelated loans collateralized by single-family residential property, totaling $1.4 million.

    Our ACL at December 31, 2024, totaled $54.7 million, representing 1.36% of gross loans and 659% of NPLs, as compared to an ACL of $52.5 million, representing 1.36% of gross loans and 786% of NPLs, at June 30, 2024. The Company has estimated its expected credit losses as of December 31, 2024, under ASC 326-20, and management believes the ACL as of that date was adequate based on that estimate. There remains, however, significant uncertainty as borrowers adjust to relatively high market interest rates, although the Federal Reserve has reduced short-term rates somewhat during this fiscal year. Qualitative adjustments in the Company’s ACL model were increased compared to June 30, 2024, due to various factors that are relevant to determining expected collectability of credit. The Company decreased the allowance attributable to classified hotel loans that have been slow to recover from the COVID-19 pandemic due to updated collateral appraisals, which provided a more favorable assessment than the Company’s prior period estimates. Additionally, provision for credit loss (PCL) was required due to loan growth in the second quarter of fiscal year 2025. As a percentage of average loans outstanding, the Company recorded net charge offs of 0.02% (annualized) during the current period, as compared to 0.10% for the same period of the prior fiscal year.

    Total liabilities were $4.4 billion at December 31, 2024, an increase of $279.7 million, or 6.8%, as compared to June 30, 2024.

    Deposits were $4.2 billion at December 31, 2024, an increase of $267.6 million, or 6.8%, as compared to June 30, 2024. The deposit portfolio saw year-to-date increases primarily in certificates of deposit and savings accounts, as customers continued to move balances into high yield savings accounts and special rate time deposits in the relatively high rate environment. Public unit balances totaled $565.9 million at December 31, 2024, a decrease of $28.7 million compared to June 30, 2024, but an increase of $55.4 million, as compared to $510.5 million at September 30, 2024. Public unit balances increased compared to September 30, 2024, the linked quarter, due to seasonal inflows, but decreased year-to-date due to the loss of a large local public unit depositor. Brokered deposits totaled $254.0 million at December 31, 2024, an increase of $80.3 million as compared to June 30, 2024, but a decrease of $19.1 million compared to September 30, 2024, the linked quarter. Year-to-date, the Company increased brokered deposits due to more attractive pricing for brokered certificates of deposit relative to local market rates and the need to meet seasonal loan demand, and to build on-balance sheet liquidity. The average loan-to-deposit ratio for the second quarter of fiscal 2025 was 96.4%, as compared to 96.3% for the quarter ended June 30, 2024, and 94.3% for the same period of the prior fiscal year. The loan-to-deposit ratio at period end December 31, 2024, was 95.6%. The table below illustrates changes in deposit balances by type over recent periods:

                                   
    Summary Deposit Data as of:      Dec. 31,      Sep. 30,      June 30,      Mar. 31,      Dec. 31,
    (dollars in thousands)   2024   2024   2024   2024   2023
                                   
    Non-interest bearing deposits   $ 514,199   $ 503,209   $ 514,107   $ 525,959   $ 534,194
    NOW accounts     1,211,402     1,128,917     1,239,663     1,300,358     1,304,371
    MMDAs – non-brokered     347,271     320,252     334,774     359,569     378,578
    Brokered MMDAs     3,018     12,058     2,025     10,084     20,560
    Savings accounts     573,291     556,030     517,084     455,212     372,824
    Total nonmaturity deposits     2,649,181     2,520,466     2,607,653     2,651,182     2,610,527
                                   
    Certificates of deposit – non-brokered     1,310,421     1,258,583     1,163,650     1,158,063     1,194,993
    Brokered certificates of deposit     251,025     261,093     171,756     176,867     179,980
    Total certificates of deposit     1,561,446     1,519,676     1,335,406     1,334,930     1,374,973
                                   
    Total deposits   $ 4,210,627   $ 4,040,142   $ 3,943,059   $ 3,986,112   $ 3,985,500
                                   
    Public unit nonmaturity accounts   $ 482,406   $ 447,638   $ 541,445   $ 572,631   $ 544,873
    Public unit certificates of deposit     83,506     62,882     53,144     51,834     49,237
    Total public unit deposits   $ 565,912   $ 510,520   $ 594,589   $ 624,465   $ 594,110
     

    FHLB advances were $107.1 million at December 31, 2024, an increase of $5.0 million, or 4.9%, as compared to June 30, 2024.

    The Company’s stockholders’ equity was $512.4 million at December 31, 2024, an increase of $23.6 million, or 4.8%, as compared to June 30, 2024. The increase was attributable primarily to earnings retained after cash dividends paid, in combination with a $1.0 million reduction in accumulated other comprehensive losses (AOCL) as the market value of the Company’s investments appreciated due to the decrease in market interest rates. The AOCL totaled $16.4 million at December 31, 2024 compared $17.5 million at June 30, 2024. The Company does not hold any securities classified as held-to-maturity.

    Quarterly Income Statement Summary:

    The Company’s net interest income for the three-month period ended December 31, 2024, was $38.1 million, an increase of $3.7 million, or 10.6%, as compared to the same period of the prior fiscal year. The increase was attributable to a 6.7% increase in the average balance of interest-earning assets and an 11-basis point increase in the net interest margin, from 3.25% to 3.36%, as the 32-basis point increase in the yield on interest-earning assets was partially offset by a 22-basis point increase in cost of interest-bearing liabilities.

    Loan discount accretion and deposit premium amortization related to the May 2020 acquisition of Central Federal Savings & Loan Association, the February 2022 merger of FortuneBank, and the January 2023 acquisition of Citizens Bank & Trust resulted in $987,000 in net interest income for the three-month period ended December 31, 2024, as compared to $1.5 million in net interest income for the same period a year ago. Combined, this component of net interest income contributed nine basis points to net interest margin in the three-month period ended December 31, 2024, compared to 14 basis points during the same period of the prior fiscal year, and as compared to a nine basis point contribution in the linked quarter, ended September 30, 2024, when the net interest margin was 3.37%.

    The Company recorded a PCL of $932,000 in the three-month period ended December 31, 2024, as compared to a PCL of $900,000 in the same period of the prior fiscal year. The current period PCL was the result of a $501,000 provision attributable to the ACL for loan balances outstanding and a $431,000 provision attributable to the allowance for off-balance sheet credit exposures.

    The Company’s noninterest income for the three-month period ended December 31, 2024, was $6.9 million, an increase of $1.2 million, or 21.7%, as compared to the same period of the prior fiscal year. The increase was primarily attributable to the Company’s realization of a $682,000 loss on sale of AFS securities in the year-ago period, as well as increases in deposit account charges and related fees, other loan fees, and wealth management fees. These increases were partially offset by lower net realized gains on sale of loans, which were primarily driven by a reduction in gains on sale of Small Business Administration (SBA) loans, and lower loan late charges.

    Noninterest expense for the three-month period ended December 31, 2024, was $24.9 million, an increase of $1.0 million, or 4.3%, as compared to the same period of the prior fiscal year. The increase was attributable primarily to increases in compensation and benefits, legal and professional fees, other noninterest expense, and occupancy expenses. The increase in compensation and benefits expense was primarily due to a trend increase in employee headcount, as well as annual merit increases. Legal and professional fees were elevated due to consulting fees tied to internal projects, recruiter costs, and the settlement of a legal matter. Other noninterest expense increased due to increased expenses associated with SBA loans and costs for employee travel and training. Lastly, occupancy and equipment expenses increased primarily due to depreciation on recent capitalized expenditures, including buildings, equipment, and signage. Partially offsetting these increases from the prior year period are lower data processing and telecommunication expenses, and a reduction in intangible amortization, as the core deposit intangible recognized in an older merger was fully amortized in the prior quarter.

    The efficiency ratio for the three-month period ended December 31, 2024, was 55.3%, as compared to 58.5% in the same period of the prior fiscal year. The change was attributable to net interest income and noninterest income growing faster than operating expenses.

    The income tax provision for the three-month period ended December 31, 2024, was $4.5 million, an increase of $1.4 million, or 43.3%, as compared to the same period of the prior fiscal year. The current period effective tax rate was 23.7%, as compared to 20.6% in the same quarter of the prior fiscal year. The effective tax rate for the December 31, 2024, quarter was elevated due to an adjustment of tax accruals attributable to completed merger & acquisition activity.

    Forward-Looking Information:

    Except for the historical information contained herein, the matters discussed in this press release may be deemed to be forward-looking statements that are subject to known and unknown risks, uncertainties, and other factors that could cause the actual results to differ materially from the forward-looking statements, including: potential adverse impacts to the economic conditions in the Company’s local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, expected cost savings, synergies and other benefits from our merger and acquisition activities might not be realized to the extent expected, within the anticipated time frames, or at all, and costs or difficulties relating to integration matters, including but not limited to customer and employee retention and labor shortages, might be greater than expected and goodwill impairment charges might be incurred; the strength of the United States economy in general and the strength of local economies in which we conduct operations; fluctuations in interest rates and the possibility of a recession; monetary and fiscal policies of the FRB and the U.S. Government and other governmental initiatives affecting the financial services industry; the risks of lending and investing activities, including changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for credit losses; our ability to access cost-effective funding; the timely development and acceptance of our new products and services and the perceived overall value of these products and services by users, including the features, pricing and quality compared to competitors’ products and services; fluctuations in real estate values in both residential and commercial real estate markets, as well as agricultural business conditions; demand for loans and deposits; legislative or regulatory changes that adversely affect our business; changes in accounting principles, policies, or guidelines; results of regulatory examinations, including the possibility that a regulator may, among other things, require an increase in our reserve for credit losses or write-down of assets; the impact of technological changes; and our success at managing the risks involved in the foregoing. Any forward-looking statements are based upon management’s beliefs and assumptions at the time they are made. We undertake no obligation to publicly update or revise any forward-looking statements or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise. In light of these risks, uncertainties and assumptions, the forward-looking statements discussed might not occur, and you should not put undue reliance on any forward-looking statements.

    Southern Missouri Bancorp, Inc.
    UNAUDITED CONDENSED CONSOLIDATED FINANCIAL INFORMATION
     
                                     
    Summary Balance Sheet Data as of:      Dec. 31,      Sep. 30,      June 30,      Mar. 31,      Dec. 31,  
    (dollars in thousands, except per share data)   2024   2024   2024   2024   2023  
                                     
    Cash equivalents and time deposits   $ 146,078   $ 75,591   $ 61,395   $ 168,763   $ 217,090  
    Available for sale (AFS) securities     468,060     420,209     427,903     433,689     417,406  
    FHLB/FRB membership stock     18,099     18,064     17,802     17,734     18,023  
    Loans receivable, gross     4,026,979     3,966,518     3,849,803     3,771,194     3,731,890  
    Allowance for credit losses     54,740     54,437     52,516     51,336     50,084  
    Loans receivable, net     3,972,239     3,912,081     3,797,287     3,719,858     3,681,806  
    Bank-owned life insurance     74,643     74,119     73,601     73,101     72,618  
    Intangible assets     75,399     76,340     77,232     78,049     79,088  
    Premises and equipment     96,418     96,087     95,952     95,801     94,519  
    Other assets     56,738     56,709     53,144     59,997     62,952  
    Total assets   $ 4,907,674   $ 4,729,200   $ 4,604,316   $ 4,646,992   $ 4,643,502  
                                     
    Interest-bearing deposits   $ 3,696,428   $ 3,536,933   $ 3,428,952   $ 3,437,420   $ 3,451,306  
    Noninterest-bearing deposits     514,199     503,209     514,107     548,692     534,194  
    Securities sold under agreements to repurchase     15,000     15,000     9,398     9,398     9,398  
    FHLB advances     107,070     107,069     102,050     102,043     113,036  
    Other liabilities     39,424     38,191     37,905     46,712     42,256  
    Subordinated debt     23,182     23,169     23,156     23,143     23,130  
    Total liabilities     4,395,303     4,223,571     4,115,568     4,167,408     4,173,320  
                                     
    Total stockholders’ equity     512,371     505,629     488,748     479,584     470,182  
                                     
    Total liabilities and stockholders’ equity   $ 4,907,674   $ 4,729,200   $ 4,604,316   $ 4,646,992   $ 4,643,502  
                                     
    Equity to assets ratio     10.44 %     10.69 %     10.61 %     10.32 %     10.13 %
                                     
    Common shares outstanding     11,277,167     11,277,167     11,277,737     11,366,094     11,336,462  
    Less: Restricted common shares not vested     46,653     56,553     57,956     57,956     49,676  
    Common shares for book value determination     11,230,514     11,220,614     11,219,781     11,308,138     11,286,786  
                                     
    Book value per common share   $ 45.62   $ 45.06   $ 43.56   $ 42.41   $ 41.66  
    Less: Intangible assets per common share     6.71     6.80     6.88     6.90     7.01  
    Tangible book value per common share (1)     38.91     38.26     36.68     35.51     34.65  
    Closing market price     57.37     56.49     45.01     43.71     53.39  
                                     

    (1)   Non-GAAP financial measure.

                                     
    Nonperforming asset data as of:      Dec. 31,      Sep. 30,      June 30,      Mar. 31,      Dec. 31,  
    (dollars in thousands)   2024   2024   2024   2024   2023  
                                     
    Nonaccrual loans   $ 8,309   $ 8,206   $ 6,680   $ 7,329   $ 5,922  
    Accruing loans 90 days or more past due     —     —     —     81     —  
    Total nonperforming loans     8,309     8,206     6,680     7,410     5,922  
    Other real estate owned (OREO)     2,423     3,842     3,865     3,791     3,814  
    Personal property repossessed     37     21     23     60     40  
    Total nonperforming assets   $ 10,769   $ 12,069   $ 10,568   $ 11,261   $ 9,776  
                                     
    Total nonperforming assets to total assets     0.22 %     0.26 %     0.23 %     0.24 %     0.21 %  
    Total nonperforming loans to gross loans     0.21 %     0.21 %     0.17 %     0.20 %     0.16 %  
    Allowance for credit losses to nonperforming loans     658.80 %     663.38 %     786.17 %     692.79 %     845.73 %  
    Allowance for credit losses to gross loans     1.36 %     1.37 %     1.36 %     1.36 %     1.34 %  
                                     
    Performing modifications to borrowers experiencing financial difficulty   $ 24,083   $ 24,340   $ 24,602   $ 24,848   $ 24,237  
                                     
                                   
        For the three-month period ended
    Quarterly Summary Income Statement Data:   Dec. 31,      Sep. 30,      June 30,      Mar. 31,      Dec. 31,
    (dollars in thousands, except per share data)      2024   2024   2024   2024   2023
                                   
    Interest income:                                   
    Cash equivalents   $ 784   $ 78   $ 541   $ 2,587   $ 1,178
    AFS securities and membership stock     5,558     5,547     5,677     5,486     5,261
    Loans receivable     63,082     61,753     58,449     55,952     55,137
    Total interest income     69,424     67,378     64,667     64,025     61,576
    Interest expense:                              
    Deposits     29,538     28,796     27,999     27,893     25,445
    Securities sold under agreements to repurchase     226     160     125     128     126
    FHLB advances     1,099     1,326     1,015     1,060     1,079
    Subordinated debt     418     435     433     435     440
    Total interest expense     31,281     30,717     29,572     29,516     27,090
    Net interest income     38,143     36,661     35,095     34,509     34,486
    Provision for credit losses     932     2,159     900     900     900
    Noninterest income:                              
    Deposit account charges and related fees     2,237     2,184     1,978     1,847     1,784
    Bank card interchange income     1,301     1,499     1,770     1,301     1,329
    Loan late charges     —     —     170     150     146
    Loan servicing fees     232     286     494     267     285
    Other loan fees     944     1,063     617     757     644
    Net realized gains on sale of loans     133     361     97     99     304
    Net realized losses on sale of AFS securities     —     —     —     (807     (682
    Earnings on bank owned life insurance     522     517     498     483     472
    Insurance brokerage commissions     300     287     331     312     310
    Wealth management fees     843     730     838     866     668
    Other noninterest income     353     247     974     309     380
    Total noninterest income     6,865     7,174     7,767     5,584     5,640
    Noninterest expense:                              
    Compensation and benefits     13,737     14,397     13,894     13,750     12,961
    Occupancy and equipment, net     3,585     3,689     3,790     3,623     3,478
    Data processing expense     2,224     2,171     1,929     2,349     2,382
    Telecommunications expense     354     428     468     464     465
    Deposit insurance premiums     588     472     638     677     598
    Legal and professional fees     619     1,208     516     412     387
    Advertising     442     546     640     622     392
    Postage and office supplies     283     306     308     344     283
    Intangible amortization     897     897     1,018     1,018     1,018
    Foreclosed property expenses     73     12     52     60     44
    Other noninterest expense     2,074     1,715     1,749     1,730     1,852
    Total noninterest expense     24,876     25,841     25,002     25,049     23,860
    Net income before income taxes     19,200     15,835     16,960     14,144     15,366
    Income taxes     4,547     3,377     3,430     2,837     3,173
    Net income     14,653     12,458     13,530     11,307     12,193
    Less: Distributed and undistributed earnings allocated                              
    to participating securities     61     62     69     58     53
    Net income available to common shareholders   $ 14,592   $ 12,396   $ 13,461   $ 11,249   $ 12,140
                                   
    Basic earnings per common share   $ 1.30   $ 1.10   $ 1.19   $ 1.00   $ 1.08
    Diluted earnings per common share     1.30     1.10     1.19     0.99     1.07
    Dividends per common share     0.23     0.23     0.21     0.21     0.21
    Average common shares outstanding:                              
    Basic     11,231,000     11,221,000     11,276,000     11,302,000     11,287,000
    Diluted     11,260,000     11,240,000     11,283,000     11,313,000     11,301,000
                                   
                                     
        For the three-month period ended  
    Quarterly Average Balance Sheet Data:   Dec. 31,      Sep. 30,      June 30,      Mar. 31,      Dec. 31,  
    (dollars in thousands)      2024   2024   2024   2024   2023  
                                     
    Interest-bearing cash equivalents   $ 64,976   $ 5,547   $ 39,432   $ 182,427   $ 89,123  
    AFS securities and membership stock     479,633     460,187     476,198     472,904     468,498  
    Loans receivable, gross     3,989,643     3,889,740     3,809,209     3,726,631     3,691,586  
    Total interest-earning assets     4,534,252     4,355,474     4,324,839     4,381,962     4,249,207  
    Other assets     291,217     283,056     285,956     291,591     301,415  
    Total assets   $ 4,825,469   $ 4,638,530   $ 4,610,795   $ 4,673,553   $ 4,550,622  
                                     
    Interest-bearing deposits   $ 3,615,767   $ 3,416,752   $ 3,417,360   $ 3,488,104   $ 3,341,221  
    Securities sold under agreements to repurchase     15,000     12,321     9,398     9,398     9,398  
    FHLB advances     107,054     123,723     102,757     111,830     113,519  
    Subordinated debt     23,175     23,162     23,149     23,137     23,124  
    Total interest-bearing liabilities     3,760,996     3,575,958     3,552,664     3,632,469     3,487,262  
    Noninterest-bearing deposits     524,878     531,946     539,637     532,075     572,101  
    Other noninterest-bearing liabilities     31,442     33,737     35,198     33,902     31,807  
    Total liabilities     4,317,316     4,141,641     4,127,499     4,198,446     4,091,170  
                                     
    Total stockholders’ equity     508,153     496,889     483,296     475,107     459,452  
                                     
    Total liabilities and stockholders’ equity   $ 4,825,469   $ 4,638,530   $ 4,610,795   $ 4,673,553   $ 4,550,622  
                                     
    Return on average assets     1.21 %     1.07 %     1.17 %     0.97 %     1.07 %
    Return on average common stockholders’ equity     11.5 %     10.0 %     11.2 %     9.5 %     10.6 %
                                     
    Net interest margin     3.36 %     3.37 %     3.25 %     3.15 %     3.25 %
    Net interest spread     2.79 %     2.75 %     2.65 %     2.59 %     2.69 %
                                     
    Efficiency ratio     55.3 %     59.0 %     58.3 %     61.2 %     58.5 %

    The MIL Network –

  • MIL-OSI: Five Star Bancorp Announces Quarterly and Annual Results

    Source: GlobeNewswire (MIL-OSI)

    RANCHO CORDOVA, Calif., Jan. 27, 2025 (GLOBE NEWSWIRE) — Five Star Bancorp (Nasdaq: FSBC) (“Five Star” or the “Company”), a holding company that operates through its wholly owned banking subsidiary, Five Star Bank (the “Bank”), today reported net income of $13.3 million for the three months ended December 31, 2024, as compared to $10.9 million for the three months ended September 30, 2024 and $10.8 million for the three months ended December 31, 2023. Net income for the year ended December 31, 2024 was $45.7 million, as compared to $47.7 million for the year ended December 31, 2023.

    Financial and Other Highlights

    Performance highlights and other developments for the Company for the periods noted below included the following:

      Three months ended
    (in thousands, except per share and share data) December 31, 2024   September 30, 2024   December 31, 2023
    Return on average assets (“ROAA”)   1.31 %     1.18 %     1.26 %
    Return on average equity (“ROAE”)   13.48 %     11.31 %     15.45 %
    Pre-tax income $ 19,367     $ 15,241     $ 15,151  
    Pre-tax, pre-provision income(1) $ 20,667     $ 17,991     $ 15,951  
    Net income $ 13,317     $ 10,941     $ 10,799  
    Basic earnings per common share $ 0.63     $ 0.52     $ 0.63  
    Diluted earnings per common share $ 0.63     $ 0.52     $ 0.63  
    Weighted average basic common shares outstanding   21,182,143       21,182,143       17,175,445  
    Weighted average diluted common shares outstanding   21,235,318       21,232,758       17,193,114  
    Shares outstanding at end of period   21,319,083       21,319,583       17,256,989  
      Year ended
    (in thousands, except per share and share data) December 31, 2024   December 31, 2023
    ROAA   1.23 %     1.44 %
    ROAE   12.72 %     17.85 %
    Pre-tax income $ 64,721     $ 66,616  
    Pre-tax, pre-provision income(1) $ 71,671     $ 70,616  
    Net income $ 45,671     $ 47,734  
    Basic earnings per common share $ 2.26     $ 2.78  
    Diluted earnings per common share $ 2.26     $ 2.78  
    Weighted average basic common shares outstanding   20,154,385       17,166,592  
    Weighted average diluted common shares outstanding   20,205,440       17,187,969  
    Shares outstanding at end of period   21,319,083       17,256,989  
                   

    (1) See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.

    James E. Beckwith, President and Chief Executive Officer, commented:

    “While we focus on the future and maintaining a position of distinction and respect in the markets we serve, we proudly look back at 2024 as another outstanding year of achievement. We experienced consistent, strong financial performance with year-over-year growth in loans and deposits, a consistent shareholder dividend, and stable net interest margin. We also continued our successful execution of our San Francisco market expansion and now have 27 employees in the San Francisco Bay Area who contributed $229.5 million in deposits from June 5, 2023 to December 31, 2024. We have managed expenses and executed on conservative underwriting practices, which are foundational to our success.

    Five Star Bank consistently executes on client and community-focused initiatives, and in 2024, we received a Super Premier rating from Findley Reports, an IDC Superior rating, and a Bauer Financial rating of 5 stars (out of five). We were also awarded the prestigious 2023 Raymond James Community Bankers Cup, were among S&P Global Market Intelligence’s 2023 Top 20 Best-Performing Community banks in the nation (with assets between $3 billion and $10 billion), and were ranked fifth on the 2024 Bank Director Magazine (RankingBanking) Best U.S. Banks with assets less than $5 billion. We also received the Greater Sacramento Economic Council’s Sustainability Award recognizing a company that has supported industry growth in the Greater Sacramento region.

    In 2024, our senior leadership was recognized by the Sacramento Business Journal with a C-Suite Award, a Women Who Mean Business honor, a 40 Under 40 recognition, and placement on the Power 100 list. Our senior leadership was also recognized on the San Francisco Business Times’ Newsmaker 100 list, as part of the Independent Community Bankers of America’s 40 Under 40: Emerging Community Bank Leaders, among the Association of Latino Professionals for America’s 50 Most Powerful Latinas, and with a National Association of Women Business Owners’ Sacramento Valley Outstanding Women Leaders’ Executive Woman award.

    Being recognized as community leaders ensures Five Star Bank remains top of mind in the markets we serve as we continue to build-out our market presence. I am humbled and proud of our team’s accomplishments and look forward to the future.”

    Financial highlights included the following:

    • The San Francisco Bay Area team, which increased from 24 to 27 employees during the three months ended December 31, 2024, generated deposit balances totaling $229.5 million at December 31, 2024, an increase of $40.4 million from September 30, 2024.
    • Cash and cash equivalents were $352.3 million, representing 9.90% of total deposits at December 31, 2024, as compared to 7.38% at September 30, 2024.
    • Total deposits increased by $158.0 million, or 4.65%, during the three months ended December 31, 2024, due to increases in both non-wholesale and wholesale deposits, which the Company defines as brokered deposits and public time deposits. During the three months ended December 31, 2024, non-wholesale deposits increased by $8.0 million, or 0.27%, and wholesale deposits increased by $150.0 million, or 36.59%.
    • Consistent, disciplined management of expenses contributed to our efficiency ratio of 41.21% for the three months ended December 31, 2024, as compared to 43.37% for the three months ended September 30, 2024.
    • For the three months ended December 31, 2024, net interest margin was 3.36%, as compared to 3.37% for the three months ended September 30, 2024 and 3.19% for the three months ended December 31, 2023. For the year ended December 31, 2024, net interest margin was 3.32%, as compared to 3.42% for the year ended December 31, 2023. The effective Federal Funds rate fell to 4.33% as of December 31, 2024 from 4.83% as of September 30, 2024 and 5.33% as of December 31, 2023.
    • Other comprehensive loss was $2.6 million during the three months ended December 31, 2024. Unrealized losses, net of tax effect, on available-for-sale securities were $12.4 million as of December 31, 2024. Total carrying value of held-to-maturity and available-for-sale securities represented 0.07% and 2.48% of total interest-earning assets, respectively, as of December 31, 2024.
    • The Company’s common equity Tier 1 capital ratio was 11.02% and 10.93% as of December 31, 2024 and September 30, 2024, respectively. The Bank continues to meet all requirements to be considered “well-capitalized” under applicable regulatory guidelines.
    • Loan and deposit growth in the three and twelve months ended December 31, 2024 was as follows:
    (in thousands) December 31, 2024   September 30, 2024   $ Change   % Change
    Loans held for investment $ 3,532,686   $ 3,460,565   $ 72,121   2.08 %
    Non-interest-bearing deposits   922,629     906,939     15,690   1.73 %
    Interest-bearing deposits   2,635,365     2,493,040     142,325   5.71 %
                   
    (in thousands) December 31, 2024   December 31, 2023   $ Change   % Change
    Loans held for investment $ 3,532,686   $ 3,081,719   $ 450,967   14.63 %
    Non-interest-bearing deposits   922,629     831,101     91,528   11.01 %
    Interest-bearing deposits   2,635,365     2,195,795     439,570   20.02 %
                           
    • The ratio of nonperforming loans to loans held for investment at period end decreased from 0.06% at December 31, 2023 to 0.05% at December 31, 2024.
    • The Company’s Board of Directors declared, and the Company subsequently paid, a cash dividend of $0.20 per share during the three months ended December 31, 2024. The Company’s Board of Directors subsequently declared another cash dividend of $0.20 per share on January 16, 2025, which the Company expects to pay on February 10, 2025 to shareholders of record as of February 3, 2025.

    Summary Results

    Three months ended December 31, 2024, as compared to three months ended September 30, 2024

    The Company’s net income was $13.3 million for the three months ended December 31, 2024, as compared to $10.9 million for the three months ended September 30, 2024. Net interest income increased by $3.1 million, primarily due to an increase in interest income driven by a larger average balance of interest-earning assets, partially offset by an increase in interest expense due to a larger average balance of deposits, as compared to September 30, 2024. The provision for credit losses decreased by $1.5 million, reflecting adjustments to expectations for credit losses based on economic trends and forecasts in the three months ended December 31, 2024 compared to the three months ended September 30, 2024. Non-interest income increased by $0.3 million, primarily due to income received on equity investments in venture-backed funds during the three months ended December 31, 2024, combined with a loss from equity investments in venture-backed funds during the three months ended September 30, 2024. Non-interest expense increased by $0.7 million, primarily due to: (i) increased salaries and employee benefits mainly resulting from increased loan production driving higher commissions expense period-over-period; and (ii) increased advertising and promotional expenses due to a larger number of events sponsored and attended period-over-period.

    Three months ended December 31, 2024, as compared to three months ended December 31, 2023

    The Company’s net income was $13.3 million for the three months ended December 31, 2024, as compared to $10.8 million for the three months ended December 31, 2023. Net interest income increased by $6.8 million, primarily due to an increase in interest income driven by higher average balances and yields on loans, partially offset by an increase in interest expense due to higher average balances and rates on deposits. The provision for credit losses increased by $0.5 million, reflecting adjustments to expectations for credit losses based on economic trends and forecasts in the three months ended December 31, 2024 compared to the three months ended December 31, 2023. Non-interest income decreased by $0.3 million, primarily due to lower swap referral and rate lock fees during the three months ended December 31, 2024 compared to the same quarter of the prior year. Non-interest expense increased by $1.8 million with an increase in salaries and employee benefits related to the Company’s expansion into the San Francisco Bay Area as the leading driver.

    Year ended December 31, 2024, as compared to year ended December 31, 2023

    The Company’s net income was $45.7 million for the year ended December 31, 2024, as compared to $47.7 million for the year ended December 31, 2023. Net interest income increased by $8.8 million, primarily due to an increase in interest income driven by higher average balances and yields on loans, partially offset by an increase in interest expense due to higher average balances and rates on deposits. The provision for credit losses increased by $3.0 million, or 73.75%, as loan originations in the year ended December 31, 2024 were almost double those for the year ended December 31, 2023. Non-interest income decreased by $1.1 million, primarily due to lower income received on equity investments in venture-backed funds during the year ended December 31, 2024 than during the year ended December 31, 2023. Non-interest expense increased by $6.7 million with an increase in salaries and employee benefits related to the Company’s expansion into the San Francisco Bay Area as the leading driver.

    The following is a summary of the components of the Company’s operating results and performance ratios for the periods indicated:

        Three months ended        
    (in thousands, except per share data)   December 31, 2024   September 30, 2024   $ Change   % Change
    Selected operating data:                
    Net interest income   $ 33,489     $ 30,386     $ 3,103     10.21 %
    Provision for credit losses     1,300       2,750       (1,450 )   (52.73) %
    Non-interest income     1,666       1,381       285     20.64 %
    Non-interest expense     14,488       13,776       712     5.17 %
    Pre-tax income     19,367       15,241       4,126     27.07 %
    Provision for income taxes     6,050       4,300       1,750     40.70 %
    Net income   $ 13,317     $ 10,941     $ 2,376     21.72 %
    Earnings per common share:                
    Basic   $ 0.63     $ 0.52     $ 0.11     21.15 %
    Diluted   $ 0.63     $ 0.52     $ 0.11     21.15 %
    Performance and other financial ratios:                
    ROAA     1.31 %     1.18 %        
    ROAE     13.48 %     11.31 %        
    Net interest margin     3.36 %     3.37 %        
    Cost of funds     2.65 %     2.72 %        
    Efficiency ratio     41.21 %     43.37 %        
        Three months ended        
    (in thousands, except per share data)   December 31, 2024   December 31, 2023   $ Change   % Change
    Selected operating data:                
    Net interest income   $ 33,489     $ 26,678     $ 6,811     25.53 %
    Provision for credit losses     1,300       800       500     62.50 %
    Non-interest income     1,666       1,936       (270 )   (13.95) %
    Non-interest expense     14,488       12,663       1,825     14.41 %
    Pre-tax income     19,367       15,151       4,216     27.83 %
    Provision for income taxes     6,050       4,352       1,698     39.02 %
    Net income   $ 13,317     $ 10,799     $ 2,518     23.32 %
    Earnings per common share:                
    Basic   $ 0.63     $ 0.63     $ —     — %
    Diluted   $ 0.63     $ 0.63     $ —     — %
    Performance and other financial ratios:                
    ROAA     1.31 %     1.26 %        
    ROAE     13.48 %     15.45 %        
    Net interest margin     3.36 %     3.19 %        
    Cost of funds     2.65 %     2.50 %        
    Efficiency ratio     41.21 %     44.25 %        
                             
        Year ended        
    (in thousands, except per share data)   December 31, 2024   December 31, 2023   $ Change   % Change
    Selected operating data:                
    Net interest income   $ 119,711     $ 110,880     $ 8,831     7.96 %
    Provision for credit losses     6,950       4,000       2,950     73.75 %
    Non-interest income     6,453       7,511       (1,058 )   (14.09) %
    Non-interest expense     54,493       47,775       6,718     14.06 %
    Pre-tax income     64,721       66,616       (1,895 )   (2.84) %
    Provision for income taxes     19,050       18,882       168     0.89 %
    Net income   $ 45,671     $ 47,734     $ (2,063 )   (4.32) %
    Earnings per common share:                
    Basic   $ 2.26     $ 2.78     $ (0.52 )   (18.71) %
    Diluted   $ 2.26     $ 2.78     $ (0.52 )   (18.71) %
    Performance and other financial ratios:                
    ROAA     1.23 %     1.44 %        
    ROAE     12.72 %     17.85 %        
    Net interest margin     3.32 %     3.42 %        
    Cost of funds     2.64 %     2.10 %        
    Efficiency ratio     43.19 %     40.35 %        


    Balance Sheet Summary

    (in thousands)   December 31, 2024   December 31, 2023   $ Change   % Change
    Selected financial condition data:                
    Total assets   $ 4,053,278   $ 3,593,125   $ 460,153     12.81 %
    Cash and cash equivalents     352,343     321,576     30,767     9.57 %
    Total loans held for investment     3,532,686     3,081,719     450,967     14.63 %
    Total investments     100,914     111,160     (10,246 )   (9.22) %
    Total liabilities     3,656,654     3,307,351     349,303     10.56 %
    Total deposits     3,557,994     3,026,896     531,098     17.55 %
    Subordinated notes, net     73,895     73,749     146     0.20 %
    Total shareholders’ equity     396,624     285,774     110,850     38.79 %
                               
    • Insured and collateralized deposits were approximately $2.4 billion, representing 66.92% of total deposits as of December 31, 2024. Net uninsured and uncollateralized deposits were approximately $1.2 billion as of December 31, 2024.
    • Commercial and consumer deposit accounts constituted 77.00% of total deposits. Deposit relationships of greater than $5 million represented 61.13% of total deposits and had an average age of approximately 9.28 years as of December 31, 2024.
    • Cash and cash equivalents as of December 31, 2024 were $352.3 million, representing 9.90% of total deposits at December 31, 2024, as compared to 10.62% as of December 31, 2023.
    • Total liquidity (consisting of cash and cash equivalents and unused and immediately available borrowing capacity as set forth below) was approximately $1.9 billion as of December 31, 2024.
        December 31, 2024
    (in thousands)   Line of Credit   Letters of Credit Issued   Borrowings   Available
    Federal Home Loan Bank of San Francisco (“FHLB”) advances   $ 1,212,209   $ 701,500   $ —   $ 510,709
    Federal Reserve Discount Window     862,136     —     —     862,136
    Correspondent bank lines of credit     175,000     —     —     175,000
    Cash and cash equivalents     —     —     —     352,343
    Total   $ 2,249,345   $ 701,500   $ —   $ 1,900,188

    The increase in total assets from December 31, 2023 to December 31, 2024 was primarily due to a $451.0 million increase in total loans held for investment and a $30.8 million increase in cash and cash equivalents, partially offset by a $10.2 million decrease in investments. The $451.0 million increase in total loans held for investment between December 31, 2023 and December 31, 2024 was the result of $1.1 billion in loan originations, partially offset by $263.0 million and $423.0 million in loan payoffs and paydowns, respectively. The $451.0 million increase in total loans held for investment included $281.4 million in purchased loans within the consumer concentration of the loan portfolio. The $30.8 million increase in cash and cash equivalents primarily resulted from net cash inflows related to financing and operating activities of $425.7 million and $52.3 million, respectively, partially offset by net cash outflows related to investing activities of $447.3 million.

    The increase in total liabilities from December 31, 2023 to December 31, 2024 was primarily attributable to an increase in deposits of $531.1 million, partially offset by a decrease in other borrowings of $170.0 million. The $531.1 million increase in deposits was largely due to increases in money market, time, and non-interest-bearing demand deposits of $242.9 million, $203.6 million, and $91.5 million, respectively, partially offset by decreases in interest-bearing demand and savings deposits of $5.1 million and $1.8 million, respectively.

    The increase in total shareholders’ equity from December 31, 2023 to December 31, 2024 was primarily a result of $80.9 million of additional common stock issued during the year and net income recognized of $45.7 million, partially offset by $16.2 million in cash dividends paid during the period.

    Net Interest Income and Net Interest Margin

    The following is a summary of the components of net interest income for the periods indicated:

        Three months ended        
    (in thousands)   December 31, 2024   September 30, 2024   $ Change   % Change
    Interest and fee income   $ 57,745     $ 52,667     $ 5,078   9.64 %
    Interest expense     24,256       22,281       1,975   8.86 %
    Net interest income   $ 33,489     $ 30,386     $ 3,103   10.21 %
    Net interest margin     3.36 %     3.37 %        
                     
        Three months ended        
    (in thousands)   December 31, 2024   December 31, 2023   $ Change   % Change
    Interest and fee income   $ 57,745     $ 46,180     $ 11,565   25.04 %
    Interest expense     24,256       19,502       4,754   24.38 %
    Net interest income   $ 33,489     $ 26,678     $ 6,811   25.53 %
    Net interest margin     3.36 %     3.19 %        
                     
        Year ended        
    (in thousands)   December 31, 2024   December 31, 2023   $ Change   % Change
    Interest and fee income   $ 206,951     $ 174,382     $ 32,569   18.68 %
    Interest expense     87,240       63,502       23,738   37.38 %
    Net interest income   $ 119,711     $ 110,880     $ 8,831   7.96 %
    Net interest margin     3.32 %     3.42 %        

    The following table shows the components of net interest income and net interest margin for the quarterly periods indicated:

        Three months ended
        December 31, 2024   September 30, 2024   December 31, 2023
    (in thousands)   Average Balance   Interest Income/Expense   Yield/Rate   Average Balance   Interest Income/Expense   Yield/Rate   Average Balance   Interest Income/Expense   Yield/Rate
    Assets                                    
    Interest-earning deposits in banks   $ 363,828   $ 4,335   4.74 %   $ 126,266   $ 1,657   5.22 %   $ 157,775   $ 2,100   5.28 %
    Investment securities     103,930     607   2.33 %     106,256     620   2.32 %     106,483     651   2.43 %
    Loans held for investment and sale     3,498,109     52,803   6.01 %     3,354,050     50,390   5.98 %     3,055,042     43,429   5.64 %
    Total interest-earning assets     3,965,867     57,745   5.79 %     3,586,572     52,667   5.84 %     3,319,300     46,180   5.52 %
    Interest receivable and other assets, net     91,736             91,965             80,360        
    Total assets   $ 4,057,603           $ 3,678,537           $ 3,399,660        
                                         
    Liabilities and shareholders’ equity                                    
    Interest-bearing transaction accounts   $ 298,518   $ 1,249   1.66 %   $ 302,188   $ 1,237   1.63 %   $ 291,967   $ 1,091   1.48 %
    Savings accounts     127,298     887   2.77 %     124,851     979   3.12 %     130,915     891   2.70 %
    Money market accounts     1,596,116     13,520   3.37 %     1,578,244     14,688   3.70 %     1,347,111     10,824   3.19 %
    Time accounts     617,596     7,438   4.79 %     326,640     4,172   5.08 %     417,434     5,322   5.06 %
    Subordinated notes and other borrowings     73,872     1,162   6.25 %     76,988     1,205   6.23 %     88,401     1,374   6.16 %
    Total interest-bearing liabilities     2,713,400     24,256   3.56 %     2,408,911     22,281   3.68 %     2,275,828     19,502   3.40 %
    Demand accounts     921,881             852,872             821,651        
    Interest payable and other liabilities     29,234             32,062             24,886        
    Shareholders’ equity     393,088             384,692             277,295        
    Total liabilities & shareholders’ equity   $ 4,057,603           $ 3,678,537           $ 3,399,660        
                                         
    Net interest spread           2.23 %           2.16 %           2.12 %
    Net interest income/margin       $ 33,489   3.36 %       $ 30,386   3.37 %       $ 26,678   3.19 %

    Net interest income during the three months ended December 31, 2024 increased $3.1 million, or 10.21%, to $33.5 million compared to $30.4 million during the three months ended September 30, 2024. Net interest margin totaled 3.36% for the three months ended December 31, 2024, a decrease of one basis point compared to the prior quarter. The increase in net interest income is primarily attributable to an additional $5.1 million in interest income due to a $379.3 million, or 10.58%, increase in the average balance of interest-earning assets during the three months ended December 31, 2024 compared to the prior quarter. The increase in interest income was partially offset by a $2.0 million increase in deposit interest expense due to a $376.6 million, or 11.83%, increase in the average balance of deposits during the three months ended December 31, 2024 compared to the prior quarter.

    As compared to the three months ended December 31, 2023, net interest income increased $6.8 million, or 25.53%, to $33.5 million compared to $26.7 million. Net interest margin totaled 3.36% for the three months ended December 31, 2024, an increase of 17 basis points compared to the same quarter of the prior year. The increase in net interest income is primarily attributable to an additional $9.4 million in loan interest income due to a $443.1 million, or 14.50%, increase in the average balance of loans and a 37 basis point improvement in the average yield on loans during the three months ended December 31, 2024 compared to the same quarter of the prior year. The increase in interest income was partially offset by a $5.0 million increase in deposit interest expense due to a $552.3 million, or 18.36%, increase in the average balance of deposits and a 19 basis point increase in the average cost of deposits during the three months ended December 31, 2024 compared to the same quarter of the prior year.

    The following table shows the components of net interest income and net interest margin for the annual periods indicated:

        Year ended
        December 31, 2024   December 31, 2023
    (in thousands)   Average Balance   Interest Income/Expense   Yield/Rate   Average Balance   Interest Income/Expense   Yield/Rate
    Assets                        
    Interest-earning deposits in banks   $ 218,156   $ 11,080   5.08 %   $ 184,103   $ 9,069   4.93 %
    Investment securities     106,289     2,530   2.38 %     113,515     2,600   2.29 %
    Loans held for investment and sale     3,283,874     193,341   5.89 %     2,947,603     162,713   5.52 %
    Total interest-earning assets     3,608,319     206,951   5.74 %     3,245,221     174,382   5.37 %
    Interest receivable and other assets, net     90,061             75,741        
    Total assets   $ 3,698,380           $ 3,320,962        
                             
    Liabilities and shareholders’ equity                        
    Interest-bearing transaction accounts   $ 298,137   $ 4,716   1.58 %   $ 312,944   $ 3,321   1.06 %
    Savings accounts     124,208     3,584   2.89 %     140,060     3,073   2.19 %
    Money market accounts     1,533,405     53,750   3.51 %     1,263,539     33,932   2.69 %
    Time accounts     412,007     20,348   4.94 %     372,557     17,535   4.71 %
    Subordinated notes and other borrowings     77,335     4,842   6.26 %     93,279     5,641   6.05 %
    Total interest-bearing liabilities     2,445,092     87,240   3.57 %     2,182,379     63,502   2.91 %
    Demand accounts     858,789             844,057        
    Interest payable and other liabilities     35,331             27,127        
    Shareholders’ equity     359,168             267,399        
    Total liabilities & shareholders’ equity   $ 3,698,380           $ 3,320,962        
                             
    Net interest spread           2.17 %           2.46 %
    Net interest income/margin       $ 119,711   3.32 %       $ 110,880   3.42 %

    Net interest income during the year ended December 31, 2024 increased $8.8 million, or 7.96%, to $119.7 million compared to $110.9 million during the year ended December 31, 2023. Net interest margin totaled 3.32% for the year ended December 31, 2024, a decrease of 10 basis points compared to the prior year. The increase in net interest income is primarily attributable to an additional $30.6 million in loan interest income due to a $336.3 million, or 11.41%, increase in the average balance of loans and a 37 basis point improvement in the average yield on loans as compared to the prior year. The increase in interest income was partially offset by an additional $24.5 million in deposit interest expense due to a $293.4 million, or 10.00%, increase in the average balance of deposits and a 58 basis point increase in the average cost of deposits compared to the prior year.

    Loans by Type

    The following table provides loan balances, excluding deferred loan fees, by type as of December 31, 2024:

    (in thousands)    
    Real estate:    
    Commercial   $ 2,857,173  
    Commercial land and development     3,849  
    Commercial construction     111,318  
    Residential construction     4,561  
    Residential     32,774  
    Farmland     47,241  
    Commercial:    
    Secured     170,548  
    Unsecured     27,558  
    Consumer and other     279,584  
    Net deferred loan fees     (1,920 )
    Total loans held for investment   $ 3,532,686  


    Interest-bearing Deposits

    The following table provides interest-bearing deposit balances by type as of December 31, 2024:

    (in thousands)    
    Interest-bearing demand accounts   $ 315,217
    Money market accounts     1,525,293
    Savings accounts     124,702
    Time accounts     670,153
    Total interest-bearing deposits   $ 2,635,365


    Asset Quality

    Allowance for Credit Losses

    At December 31, 2024, the Company’s allowance for credit losses was $37.8 million, as compared to $34.4 million at December 31, 2023. The $3.4 million increase in the allowance is due to a $7.5 million provision for credit losses recorded during the twelve months ended December 31, 2024, partially offset by net charge-offs of $4.1 million, mainly attributable to commercial and industrial loans, during the same period.

    The Company’s ratio of nonperforming loans to loans held for investment decreased from 0.06% at December 31, 2023 to 0.05% at December 31, 2024. Loans designated as watch increased from $39.6 million to $123.4 million between December 31, 2023 and December 31, 2024. Loans designated as substandard increased from $2.0 million to $2.6 million between December 31, 2023 and December 31, 2024. There were no loans with doubtful risk grades at December 31, 2024 or December 31, 2023.

    A summary of the allowance for credit losses by loan class is as follows:

        December 31, 2024   December 31, 2023
    (in thousands)   Amount   % of Total   Amount   % of Total
    Real estate:                
    Commercial   $ 25,864   68.44 %   $ 29,015   84.27 %
    Commercial land and development     78   0.21 %     178   0.52 %
    Commercial construction     2,268   6.00 %     718   2.08 %
    Residential construction     64   0.17 %     89   0.26 %
    Residential     270   0.71 %     151   0.44 %
    Farmland     607   1.61 %     399   1.16 %
          29,151   77.14 %     30,550   88.73 %
    Commercial:                
    Secured     5,866   15.52 %     3,314   9.62 %
    Unsecured     278   0.74 %     189   0.55 %
          6,144   16.26 %     3,503   10.17 %
    Consumer and other     2,496   6.60 %     378   1.10 %
    Total allowance for credit losses   $ 37,791   100.00 %   $ 34,431   100.00 %

    The ratio of allowance for credit losses to loans held for investment was 1.07% at December 31, 2024, as compared to 1.12% at December 31, 2023.

    Non-interest Income

    The following table presents the key components of non-interest income for the periods indicated:

        Three months ended        
    (in thousands)   December 31, 2024   September 30, 2024   $ Change   % Change
    Service charges on deposit accounts   $ 179   $ 165   $ 14     8.48 %
    Gain on sale of loans     150     306     (156 )   (50.98) %
    Loan-related fees     400     406     (6 )   (1.48) %
    FHLB stock dividends     332     327     5     1.53 %
    Earnings on bank-owned life insurance     182     162     20     12.35 %
    Other income     423     15     408     2,720.00 %
    Total non-interest income   $ 1,666   $ 1,381   $ 285     20.64 %


    Gain on sale of loans.     The decrease related primarily to an overall decline in the volume of loans sold during the three months ended December 31, 2024 compared to the three months ended September 30, 2024. During the three months ended December 31, 2024, approximately $2.0 million of loans were sold with an effective yield of 7.60%, as compared to approximately $4.4 million of loans sold with an effective yield of 7.03% during the three months ended September 30, 2024.

    Other income. The increase resulted primarily from $0.3 million of income received on equity investments in venture-backed funds during the three months ended December 31, 2024, combined with a $0.1 million loss from equity investments in venture-backed funds during the three months ended September 30, 2024.

    The following table presents the key components of non-interest income for the periods indicated:

        Three months ended      
    (in thousands)   December 31, 2024   December 31, 2023   $ Change   % Change
    Service charges on deposit accounts   $ 179   $ 165     $ 14     8.48 %
    Net gain (loss) on sale of securities     —     (167 )     167     (100.00) %
    Gain on sale of loans     150     317       (167 )   (52.68) %
    Loan-related fees     400     667       (267 )   (40.03) %
    FHLB stock dividends     332     314       18     5.73 %
    Earnings on bank-owned life insurance     182     155       27     17.42 %
    Other income     423     485       (62 )   (12.78) %
    Total non-interest income   $ 1,666   $ 1,936     $ (270 )   (13.95) %


    Net gain (loss) on sale of securities.     The decrease in the net loss on sale of securities related to the sale of two municipal securities with a par value of approximately $0.8 million for a loss of approximately $0.2 million during the three months ended December 31, 2023, with no sales occurring during the three months ended December 31, 2024.

    Gain on sale of loans. The decrease resulted from an overall decline in the volume of loans sold during the three months ended December 31, 2024, as compared to the three months ended December 31, 2023. During the three months ended December 31, 2024, approximately $2.0 million of loans were sold with an effective yield of 7.60%, as compared to approximately $5.9 million of loans sold with an effective yield of 5.41% during the three months ended December 31, 2023.

    Loan-related fees. The decrease resulted from the recognition of $0.2 million lower rate lock fees and $0.1 million lower swap referral fees during the three months ended December 31, 2024 than the three months ended December 31, 2023.

    Non-interest income for the periods indicated:

        Year ended      
    (in thousands)   December 31, 2024   December 31, 2023   $ Change   % Change
    Service charges on deposit accounts   $ 721   $ 575     $ 146     25.39 %
    Net gain (loss) on sale of securities     —     (167 )     167     (100.00) %
    Gain on sale of loans     1,274     1,952       (678 )   (34.73) %
    Loan-related fees     1,605     1,719       (114 )   (6.63) %
    FHLB stock dividends     1,320     970       350     36.08 %
    Earnings on bank-owned life insurance     644     510       134     26.27 %
    Other income     889     1,952       (1,063 )   (54.46) %
    Total non-interest income   $ 6,453   $ 7,511     $ (1,058 )   (14.09) %


    Service charges on deposit accounts.     The increase resulted primarily from a $0.2 million increase in wire transfer fees recognized, partially offset by a small decrease in other fees recognized during the year ended December 31, 2024 compared to the year ended December 31, 2023.

    Net gain (loss) on sale of securities. The decrease in the net loss on sale of securities resulted from the sale of two municipal securities with a par value of approximately $0.8 million for a loss of approximately $0.2 million during the year ended December 31, 2023, with no sales occurring during the year ended December 31, 2024.

    Gain on sale of loans. The decrease related primarily to an overall decline in the volume of loans sold during the year ended December 31, 2024 compared to the year ended December 31, 2023. During the year ended December 31, 2024, approximately $18.3 million of loans were sold with an effective yield of 6.96%, as compared to approximately $36.5 million of loans sold with an effective yield of 5.35% during the year ended December 31, 2023.

    Loan-related fees. The decrease was primarily a result of a $0.2 million net decrease in income earned from the credit card program, partially offset by a small increase in loan fee income earned on various loan types and services.

    FHLB stock dividends. The increase primarily relates to a 50 basis point increase in the annualized dividend rate earned year-over-year, while the average shares outstanding remained consistent.

    Earnings on bank-owned life insurance. The increase was primarily due to additional policies purchased between December 31, 2024 and December 31, 2023.

    Other income. The decrease resulted primarily from $0.5 million in income received on equity investments in venture-backed funds during the year ended December 31, 2024, as compared to $1.7 million in income received on equity investments in venture-back funds during the year ended December 31, 2023.

    Non-interest Expense

    The following table presents the key components of non-interest expense for the periods indicated:

        Three months ended        
    (in thousands)   December 31, 2024   September 30, 2024   $ Change   % Change
    Salaries and employee benefits   $ 8,360   $ 7,969   $ 391     4.91 %
    Occupancy and equipment     649     626     23     3.67 %
    Data processing and software     1,369     1,327     42     3.17 %
    Federal Deposit Insurance Corporation (“FDIC”) insurance     440     405     35     8.64 %
    Professional services     774     830     (56 )   (6.75) %
    Advertising and promotional     752     584     168     28.77 %
    Loan-related expenses     321     292     29     9.93 %
    Other operating expenses     1,823     1,743     80     4.59 %
    Total non-interest expense   $ 14,488   $ 13,776   $ 712     5.17 %


    Salaries and employee benefits.     The increase was primarily a result of: (i) a $0.1 million increase in salaries, benefits, and bonus expense; and (ii) a $0.5 million increase in commissions expense due to higher loan production, net of purchased consumer loans. These increases were partially offset by a $0.2 million increase in loan origination costs due to higher loan production, net of purchased consumer loans, period-over-period.

    Advertising and promotional. The increase was primarily due to the timing of events sponsored and attended during the three months ended December 31, 2024 compared to the three months ended September 30, 2024.

    The following table presents the key components of non-interest expense for the periods indicated:

        Three months ended        
    (in thousands)   December 31, 2024   December 31, 2023   $ Change   % Change
    Salaries and employee benefits   $ 8,360   $ 7,182   $ 1,178   16.40 %
    Occupancy and equipment     649     583     66   11.32 %
    Data processing and software     1,369     1,110     259   23.33 %
    FDIC insurance     440     370     70   18.92 %
    Professional services     774     658     116   17.63 %
    Advertising and promotional     752     717     35   4.88 %
    Loan-related expenses     321     268     53   19.78 %
    Other operating expenses     1,823     1,775     48   2.70 %
    Total non-interest expense   $ 14,488   $ 12,663   $ 1,825   14.41 %


    Salaries and employee benefits.     The increase was primarily a result of: (i) a $1.0 million increase in salaries, benefits, and bonus expense, of which approximately $0.8 million related to employees hired to support expansion into the San Francisco Bay Area; and (ii) a $0.7 million increase in commissions expense due to higher loan production, net of purchased consumer loans. These increases were partially offset by a $0.5 million increase in loan origination costs due to higher loan production, net of purchased consumer loans, period-over-period.

    Data processing and software. The increase was primarily due to: (i) increased usage of our digital banking platform; (ii) higher transaction volumes related to the increased number of loan and deposit accounts; and (iii) an increased number of licenses required for new users on our loan origination and documentation system.

    Professional services. The increase was primarily due to increased audit and examination fees for services provided for the three months ended December 31, 2024 compared to the three months ended December 31, 2023.

    The following table presents the key components of non-interest expense for the periods indicated:

        Year ended        
    (in thousands)   December 31, 2024   December 31, 2023   $ Change   % Change
    Salaries and employee benefits   $ 31,709   $ 27,097   $ 4,612   17.02 %
    Occupancy and equipment     2,547     2,218     329   14.83 %
    Data processing and software     5,088     4,015     1,073   26.72 %
    FDIC insurance     1,635     1,557     78   5.01 %
    Professional services     3,078     2,575     503   19.53 %
    Advertising and promotional     2,411     2,403     8   0.33 %
    Loan-related expenses     1,207     1,192     15   1.26 %
    Other operating expenses     6,818     6,718     100   1.49 %
    Total non-interest expense   $ 54,493   $ 47,775   $ 6,718   14.06 %


    Salaries and employee benefits.     The increase was the result of: (i) a $3.5 million increase in salaries, benefits, and bonus, of which approximately $3.3 million related to employees hired to support expansion into the San Francisco Bay Area; and (ii) a $1.4 million increase in commissions paid, primarily to employees in the San Francisco Bay Area. The increase was partially offset by a $0.3 million increase in loan origination costs due to higher loan production, net of purchased consumer loans, period-over-period.

    Occupancy and equipment. The increase related to rent expense for the San Francisco branch office and a new office lease to support back office staff during the year ended December 31, 2024, which did not exist for the full year ended December 31, 2023.

    Data processing and software. The increase related to: (i) increased usage of our digital banking platform; (ii) higher transaction volumes related to the increased number of loan and deposit accounts; and (iii) an increased number of licenses required for new users on our loan origination and documentation system.

    Professional services. The increase was due to an increase in audit, IT support, and other consulting fees for services provided for the year ended December 31, 2024 compared to the year ended December 31, 2023.

    Other operating expenses. The increase is primarily related to a $0.2 million increase in IntraFi Network fees resulting from an overall increase in balances carried in the network, partially offset by a $0.1 million decrease in conference and training expenses.

    Provision for Income Taxes

    Three months ended December 31, 2024, as compared to the three months ended September 30, 2024

    Provision for income taxes for the quarter ended December 31, 2024 increased by $1.8 million, or 40.70%, to $6.1 million, as compared to $4.3 million for the quarter ended September 30, 2024, which was primarily due to: (i) the increase in taxable income recognized during the three months ended December 31, 2024; and (ii) a $0.6 million provision to return true-up recorded during the three months ended December 31, 2024 related primarily to the timing of recognition of low income housing tax credits, which did not occur during the three months ended September 30, 2024. The effective tax rate was 31.24% and 28.21% for the three months ended December 31, 2024 and September 30, 2024, respectively.

    Three months ended December 31, 2024, as compared to the three months ended December 31, 2023

    Provision for income taxes increased by $1.7 million, or 39.02%, to $6.1 million for the three months ended December 31, 2024, as compared to $4.4 million for the three months ended December 31, 2023. This increase is due to: (i) the increase in taxable income for the three months ended December 31, 2024 compared to the three months ended December 31, 2023; and (ii) a $0.6 million provision to return true-up recorded during the three months ended December 31, 2024 related primarily to the timing of recognition of low income housing tax credits, which did not occur during the three months ended December 31, 2023. The effective tax rate was 31.24% and 28.72% for the three months ended December 31, 2024 and December 31, 2023, respectively.

    Year ended December 31, 2024, as compared to the year ended December 31, 2023

    Provision for income taxes increased by $0.2 million, or 0.89%, to $19.1 million for the year ended December 31, 2024, as compared to $18.9 million for the year ended December 31, 2023. This increase is due to a $0.6 million provision to return true-up recorded during the year ended December 31, 2024, partially offset by a decline in taxable income year-over-year. The effective tax rate was 29.43% and 28.34% for the years ended December 31, 2024 and December 31, 2023, respectively.

    Webcast Details

    Five Star Bancorp will host a live webcast for analysts and investors on Tuesday, January 28, 2025, at 1:00 pm ET (10:00 am PT), to discuss its fourth quarter and annual financial results. To view the live webcast, visit the “News & Events” section of the Company’s website under “Events” at https://investors.fivestarbank.com/news-events/events. The webcast will be archived on the Company’s website for a period of 90 days.

    About Five Star Bancorp

    Five Star is a bank holding company headquartered in Rancho Cordova, California. Five Star operates through its wholly owned banking subsidiary, Five Star Bank. The Bank has eight branches in Northern California.

    Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements represent plans, estimates, objectives, goals, guidelines, expectations, intentions, projections, and statements of the Company’s beliefs concerning future events, business plans, objectives, expected operating results, and the assumptions upon which those statements are based. Forward-looking statements include without limitation, any statement that may predict, forecast, indicate, or imply future results, performance, or achievements, and are typically identified with words such as “may,” “could,” “should,” “will,” “would,” “believe,” “anticipate,” “estimate,” “expect,” “aim,” “intend,” “plan,” or words or phases of similar meaning. The Company cautions that the forward-looking statements are based largely on the Company’s expectations and are subject to a number of known and unknown risks and uncertainties that are subject to change based on factors which are, in many instances, beyond the Company’s control. Such forward-looking statements are based on various assumptions (some of which may be beyond the Company’s control) and are subject to risks and uncertainties, which change over time, and other factors, which could cause actual results to differ materially from those currently anticipated. New risks and uncertainties may emerge from time to time, and it is not possible for the Company to predict their occurrence or how they will affect the Company. If one or more of the factors affecting the Company’s forward-looking information and statements proves incorrect, then the Company’s actual results, performance, or achievements could differ materially from those expressed in, or implied by, forward-looking information and statements contained in this press release. Therefore, the Company cautions you not to place undue reliance on the Company’s forward-looking information and statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 and Quarterly Reports on Form 10-Q for the three months ended March 31, 2024, June 30, 2024, and September 30, 2024, in each case under the section entitled “Risk Factors,” and other documents filed by the Company with the Securities and Exchange Commission from time to time.

    The Company disclaims any duty to revise or update the forward-looking statements, whether written or oral, to reflect actual results or changes in the factors affecting the forward-looking statements, except as specifically required by law.

    Condensed Financial Data (Unaudited)

        Three months ended
    (in thousands, except per share and share data)   December 31, 2024   September 30, 2024   December 31, 2023
    Revenue and Expense Data            
    Interest and fee income   $ 57,745     $ 52,667     $ 46,180  
    Interest expense     24,256       22,281       19,502  
    Net interest income     33,489       30,386       26,678  
    Provision for credit losses     1,300       2,750       800  
    Net interest income after provision     32,189       27,636       25,878  
    Non-interest income:            
    Service charges on deposit accounts     179       165       165  
    Net gain (loss) on sale of securities     —       —       (167 )
    Gain on sale of loans     150       306       317  
    Loan-related fees     400       406       667  
    FHLB stock dividends     332       327       314  
    Earnings on bank-owned life insurance     182       162       155  
    Other income     423       15       485  
    Total non-interest income     1,666       1,381       1,936  
    Non-interest expense:            
    Salaries and employee benefits     8,360       7,969       7,182  
    Occupancy and equipment     649       626       583  
    Data processing and software     1,369       1,327       1,110  
    FDIC insurance     440       405       370  
    Professional services     774       830       658  
    Advertising and promotional     752       584       717  
    Loan-related expenses     321       292       268  
    Other operating expenses     1,823       1,743       1,775  
    Total non-interest expense     14,488       13,776       12,663  
    Income before provision for income taxes     19,367       15,241       15,151  
    Provision for income taxes     6,050       4,300       4,352  
    Net income   $ 13,317     $ 10,941     $ 10,799  
                 
    Comprehensive Income            
    Net income   $ 13,317     $ 10,941     $ 10,799  
    Net unrealized holding (loss) gain on securities available-for-sale during the period     (3,747 )     3,549       5,744  
    Reclassification for net loss on sale of securities included in net income     —       —       167  
    Less: Income tax (benefit) expense related to other comprehensive (loss) income     (1,108 )     1,049       1,747  
    Other comprehensive (loss) income     (2,639 )     2,500       4,164  
    Total comprehensive income   $ 10,678     $ 13,441     $ 14,963  
                 
    Share and Per Share Data            
    Earnings per common share:            
    Basic   $ 0.63     $ 0.52     $ 0.63  
    Diluted   $ 0.63     $ 0.52     $ 0.63  
    Book value per share   $ 18.60     $ 18.29     $ 16.56  
    Tangible book value per share(1)   $ 18.60     $ 18.29     $ 16.56  
    Weighted average basic common shares outstanding     21,182,143       21,182,143       17,175,445  
    Weighted average diluted common shares outstanding     21,235,318       21,232,758       17,193,114  
    Shares outstanding at end of period     21,319,083       21,319,583       17,256,989  
                 
    Credit Quality            
    Allowance for credit losses to period end nonperforming loans     2,101.78 %     2,041.44 %     1,752.70 %
    Nonperforming loans to loans held for investment     0.05 %     0.05 %     0.06 %
    Nonperforming assets to total assets     0.05 %     0.05 %     0.05 %
    Nonperforming loans plus performing loan modifications to loans held for investment     0.05 %     0.05 %     0.06 %
                 
    Selected Financial Ratios            
    ROAA     1.31 %     1.18 %     1.26 %
    ROAE     13.48 %     11.31 %     15.45 %
    Net interest margin     3.36 %     3.37 %     3.19 %
    Loan to deposit     99.38 %     101.87 %     102.19 %


    (1)     See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.

        Year ended
    (in thousands, except per share and share data)   December 31, 2024   December 31, 2023
    Revenue and Expense Data        
    Interest and fee income   $ 206,951     $ 174,382  
    Interest expense     87,240       63,502  
    Net interest income     119,711       110,880  
    Provision for credit losses     6,950       4,000  
    Net interest income after provision     112,761       106,880  
    Non-interest income:        
    Service charges on deposit accounts     721       575  
    Net gain (loss) on sale of securities     —       (167 )
    Gain on sale of loans     1,274       1,952  
    Loan-related fees     1,605       1,719  
    FHLB stock dividends     1,320       970  
    Earnings on bank-owned life insurance     644       510  
    Other income     889       1,952  
    Total non-interest income     6,453       7,511  
    Non-interest expense:        
    Salaries and employee benefits     31,709       27,097  
    Occupancy and equipment     2,547       2,218  
    Data processing and software     5,088       4,015  
    FDIC insurance     1,635       1,557  
    Professional services     3,078       2,575  
    Advertising and promotional     2,411       2,403  
    Loan-related expenses     1,207       1,192  
    Other operating expenses     6,818       6,718  
    Total non-interest expense     54,493       47,775  
    Income before provision for income taxes     64,721       66,616  
    Provision for income taxes     19,050       18,882  
    Net income   $ 45,671     $ 47,734  
             
    Comprehensive Income        
    Net income   $ 45,671     $ 47,734  
    Net unrealized holding (loss) gain on securities available-for-sale during the period     (858 )     2,228  
    Reclassification for net loss on sale of securities included in net income     —       167  
    Less: Income tax (benefit) expense related to other comprehensive (loss) income     (254 )     708  
    Other comprehensive (loss) income     (604 )     1,687  
    Total comprehensive income   $ 45,067     $ 49,421  
             
    Share and Per Share Data        
    Earnings per common share:        
    Basic   $ 2.26     $ 2.78  
    Diluted   $ 2.26     $ 2.78  
    Book value per share   $ 18.60     $ 16.56  
    Tangible book value per share(1)   $ 18.60     $ 16.56  
    Weighted average basic common shares outstanding     20,154,385       17,166,592  
    Weighted average diluted common shares outstanding     20,205,440       17,187,969  
    Shares outstanding at end of period     21,319,083       17,256,989  
             
    Credit Quality        
    Allowance for credit losses to period end nonperforming loans     2,101.78 %     1,752.70 %
    Nonperforming loans to loans held for investment     0.05 %     0.06 %
    Nonperforming assets to total assets     0.05 %     0.05 %
    Nonperforming loans plus performing loan modifications to loans held for investment     0.05 %     0.06 %
             
    Selected Financial Ratios        
    ROAA     1.23 %     1.44 %
    ROAE     12.72 %     17.85 %
    Net interest margin     3.32 %     3.42 %
    Loan to deposit     99.38 %     102.19 %
                     

    (1) See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.

    (in thousands)   December 31, 2024   September 30, 2024   December 31, 2023
    Balance Sheet Data            
    Cash and due from financial institutions   $ 33,882     $ 44,531     $ 26,986  
    Interest-bearing deposits in banks     318,461       206,321       294,590  
    Time deposits in banks     4,121       4,118       5,858  
    Securities – available-for-sale, at fair value     98,194       104,238       108,083  
    Securities – held-to-maturity, at amortized cost     2,720       2,720       3,077  
    Loans held for sale     3,247       2,910       11,464  
    Loans held for investment     3,532,686       3,460,565       3,081,719  
    Allowance for credit losses     (37,791 )     (37,583 )     (34,431 )
    Loans held for investment, net of allowance for credit losses     3,494,895       3,422,982       3,047,288  
    FHLB stock     15,000       15,000       15,000  
    Operating leases, right-of-use asset     6,245       6,590       5,284  
    Premises and equipment, net     1,584       1,657       1,623  
    Bank-owned life insurance     19,375       19,192       17,180  
    Interest receivable and other assets     55,554       56,745       56,692  
    Total assets   $ 4,053,278     $ 3,887,004     $ 3,593,125  
                 
    Non-interest-bearing deposits   $ 922,629     $ 906,939     $ 831,101  
    Interest-bearing deposits     2,635,365       2,493,040       2,195,795  
    Total deposits     3,557,994       3,399,979       3,026,896  
    Subordinated notes, net     73,895       73,859       73,749  
    Other borrowings     —       —       170,000  
    Operating lease liability     6,857       7,101       5,603  
    Interest payable and other liabilities     17,908       16,135       31,103  
    Total liabilities     3,656,654       3,497,074       3,307,351  
                 
    Common stock     302,531       302,251       220,505  
    Retained earnings     106,464       97,411       77,036  
    Accumulated other comprehensive loss, net of taxes     (12,371 )     (9,732 )     (11,767 )
    Total shareholders’ equity     396,624       389,930       285,774  
    Total liabilities and shareholders’ equity   $ 4,053,278     $ 3,887,004     $ 3,593,125  
                 
    Quarterly Average Balance Data            
    Average loans held for investment and sale   $ 3,498,109     $ 3,354,050     $ 3,055,042  
    Average interest-earning assets     3,965,867       3,586,572       3,319,300  
    Average total assets     4,057,603       3,678,537       3,399,660  
    Average deposits     3,561,409       3,184,795       3,009,078  
    Average total equity     393,088       384,692       277,295  
                 
    Capital Ratios            
    Total shareholders’ equity to total assets     9.79 %     10.03 %     7.95 %
    Tangible shareholders’ equity to tangible assets(1)     9.79 %     10.03 %     7.95 %
    Total capital (to risk-weighted assets)     13.99 %     13.94 %     12.30 %
    Tier 1 capital (to risk-weighted assets)     11.02 %     10.93 %     9.07 %
    Common equity Tier 1 capital (to risk-weighted assets)     11.02 %     10.93 %     9.07 %
    Tier 1 leverage ratio     10.05 %     10.83 %     8.73 %
                             

    (1) See the section entitled “Non-GAAP Reconciliation (Unaudited)” for a reconciliation of this non-GAAP financial measure.

    Non-GAAP Reconciliation (Unaudited)

    The Company uses financial information in its analysis of the Company’s performance that is not in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company believes that these non-GAAP financial measures provide useful information to management and investors that is supplementary to the Company’s financial condition, results of operations, and cash flows computed in accordance with GAAP. However, the Company acknowledges that its non-GAAP financial measures have a number of limitations. As such, investors should not view these disclosures as a substitute for results determined in accordance with GAAP. Additionally, these non-GAAP measures are not necessarily comparable to non-GAAP financial measures that other banking companies use. Other banking companies may use names similar to those the Company uses for the non-GAAP financial measures the Company discloses, but may calculate them differently. Investors should understand how the Company and other companies each calculate their non-GAAP financial measures when making comparisons.

    Tangible shareholders’ equity to tangible assets is defined as total equity less goodwill and other intangible assets, divided by total assets less goodwill and other intangible assets. The most directly comparable GAAP financial measure is total shareholders’ equity to total assets. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible shareholders’ equity to tangible assets is the same as total shareholders’ equity to total assets at the end of each of the periods indicated.

    Tangible book value per share is defined as total shareholders’ equity less goodwill and other intangible assets, divided by the outstanding number of common shares at the end of the period. The most directly comparable GAAP financial measure is book value per share. We had no goodwill or other intangible assets at the end of any period indicated. As a result, tangible book value per share is the same as book value per share at the end of each of the periods indicated.

    Pre-tax, pre-provision income is defined as pre-tax income plus provision for credit losses. The most directly comparable GAAP financial measure is pre-tax income.

    The following reconciliation tables provide a more detailed analysis of this non-GAAP financial measure:

        Three months ended
    (in thousands)   December 31, 2024   September 30, 2024   December 31, 2023
    Pre-tax, pre-provision income            
    Pre-tax income   $ 19,367   $ 15,241   $ 15,151
    Add: provision for credit losses     1,300     2,750     800
    Pre-tax, pre-provision income   $ 20,667   $ 17,991   $ 15,951
        Year ended
    (in thousands)   December 31, 2024   December 31, 2023
    Pre-tax, pre-provision income        
    Pre-tax income   $ 64,721   $ 66,616
    Add: provision for credit losses     6,950     4,000
    Pre-tax, pre-provision income   $ 71,671   $ 70,616


    Investor Contact:
    Heather C. Luck, Chief Financial Officer
    Five Star Bancorp
    (916) 626-5008
    hluck@fivestarbank.com

    Media Contact:
    Shelley R. Wetton, Chief Marketing Officer
    Five Star Bancorp
    (916) 284-7827
    swetton@fivestarbank.com

    The MIL Network –

  • MIL-OSI Russia: Financial news: Now consumers will be able to rely on the opinions of other borrowers when choosing a credit institution

    Translartion. Region: Russians Fedetion –

    Source: Central Bank of Russia –

    The regulator has developed a methodology for calculating the ranking of banks, which will take into account the number of justified complaints about a credit institution during a calendar year and their ratio to the number of loans in effect during this period. Thus, the consumer will have the opportunity to choose the most customer-oriented banks from all banks.

    Systemically important banks and all other banks will be ranked separately. According to calculation methods, credit institutions will be distributed in the ranking in descending order of the indicator. If no more than one complaint was received against a financial institution during the year or if at the time of calculating the indicator it did not have a banking license, it will not be included in such a list.

    The regulator plans to publish the first rankings in April 2025 based on the results of 2024.

    Preview photo: JOURNEY STUDIO7 / Shutterstock / Fotodom

    Please note: This information is raw content directly from the source of the information. It is exactly what the source states and does not reflect the position of MIL-OSI or its clients.

    Please Note; This Information is Raw Content Directly from the Information Source. It is access to What the Source Is Stating and Does Not Reflect

    HTTPS: //vv. KBR.ru/Press/Event/? ID = 23317

    MIL OSI Russia News –

  • MIL-OSI Submissions: OPEC – “Connecting People to Electricity” – OPEC Fund joins Mission 300 with a US$2 billion pledge

    Source: The OPEC Fund

    January 27, 2025: Supporting access to electricity for hundreds of millions of people, the OPEC Fund for International Development (the OPEC Fund) is joining Mission 300 with an up to US$2 billion pledge. The institution will initially commit US$1 billion to support the initiative and potentially contribute an additional US$1 billion following a progress and demand evaluation in 2027. Launched by the World Bank Group (WBG) and the African Development Bank (AfDB) in collaboration with partners, the initiative aims to connect 300 million people to electricity in sub-Saharan Africa by 2030.

    The OPEC Fund made its pledge at the African Heads of State Energy Summit in Dar es Salaam, Tanzania, on Monday. President Abdulhamid Alkhalifa said: “Mission 300 has the potential to be a real game-changer for millions of people in Africa. Access to electricity will support livelihoods, empower people to set up businesses, unlock opportunities and generate economic growth. The OPEC Fund has always pursued Sustainable Development Goal 7 – Access to Affordable and Clean Energy as one of our core goals and today’s pledge further strengthens this commitment.”

    Addressing energy poverty in an environment-friendly way is a key concern of the OPEC Fund. Guided by its Climate Action Plan, the institution has significantly scaled up its engagements in recent years, especially in Africa where about 600 million people still lack access to electricity. New projects across the continent include the Niger Solar Plant Development and Electricity Access Improvement Project and the Suez Wind Power Plant in Egypt. The OPEC Fund is also a pioneer in clean cooking solutions and signed a corresponding US$35 million loan with the Republic of Madagascar in September 2024.

    Africa is the largest region of operations for the OPEC Fund. Since inception in 1976, the institution has provided some US$15 billion in public and private sector financing to countries across the continent. The OPEC Fund’s engagement is focused on empowering Africa’s huge potential based on natural resources and a skilled, young workforce.

    Mission 300 focuses on expanding the electricity grid, increasing connections in underserved areas and deploying mini-grids and standalone solar solutions to bring power to remote, off-grid communities. At the same time, Mission 300 is modernizing Africa’s energy sector by catalyzing infrastructure investment, driving comprehensive policy reforms and mobilizing private investment.

    The African Heads of States Energy Summit in Dar es Salaam (January 27-28) will highlight the urgent need for reliable, affordable and sustainable energy across the continent. Mahmoud Khene, OPEC Fund Regional Director for West & Central Africa, represented President Abdulhamid Alkhalifa at the event.

    About the OPEC Fund

    The OPEC Fund for International Development (the OPEC Fund) is the only globally mandated development institution that provides financing from member countries to non-member countries exclusively. The organization works in cooperation with developing country partners and the international development community to stimulate economic growth and social progress in low- and middle-income countries around the world.

    The OPEC Fund was established in 1976 with a distinct purpose: to drive development, strengthen communities and empower people. Our work is people-centered, focusing on financing projects that meet essential needs, such as food, energy, infrastructure, employment (particularly relating to MSMEs), clean water and sanitation, healthcare and education.

    To date, the OPEC Fund has committed more than US$29 billion to development projects in over 125 countries with an estimated total project cost of more than US$200 billion. The OPEC Fund is rated AA+/Outlook Stable by Fitch and AA+, Outlook Stable by S&P. Our vision is a world where sustainable development is a reality for all.

    MIL OSI – Submitted News –

  • MIL-OSI: Timberland Bancorp’s First Fiscal Quarter Net Income Increases to $6.86 Million

    Source: GlobeNewswire (MIL-OSI)

    • Quarterly EPS Increases 12% to $0.86 from $0.77 One Year Ago
    • Quarterly Return on Average Assets Increases to 1.41%
    • Quarterly Return on Average Equity Increases to 11.03%
    • Quarterly Net Interest Margin Increases to 3.64%

    HOQUIAM, Wash., Jan. 27, 2025 (GLOBE NEWSWIRE) — Timberland Bancorp, Inc. (NASDAQ: TSBK) (“Timberland” or “the Company”), the holding company for Timberland Bank (the “Bank”), today reported net income of $6.86 million, or $0.86 per diluted common share for the quarter ended December 31, 2024.  This compares to net income of $6.36 million, or $0.79 per diluted common share for the preceding quarter and $6.30 million, or $0.77 per diluted common share, for the comparable quarter one year ago.

    “We started off our 2025 fiscal year on solid footing, with net income, earnings per share and profitability metrics all improving compared to the prior quarter,” stated Dean Brydon, Chief Executive Officer.  “Fiscal first quarter net income and earnings per share increased 8% and 9%, respectively, compared to the prior quarter, reflecting an improvement in our net interest margin and lower provisions for credit losses compared to the prior quarter.  Compared to the first fiscal quarter a year ago, net income and earnings per share increased 9% and 12%, respectively.  In addition to all key performance metrics improving compared to the prior quarter and year ago quarter, tangible book value per share continued to trend upward.”

    “As a result of Timberland’s solid earnings and strong capital position, our Board of Directors announced a quarterly cash dividend to shareholders of $0.25 per share, payable on February 28, 2025, to shareholders of record on February 14, 2025,” stated Jonathan Fischer, President and Chief Operating Officer.  “This represents the 49th consecutive quarter Timberland will have paid a cash dividend.” 

    “A highlight of the quarter was our net interest margin expanding six basis points to 3.64%, compared to the preceding quarter,” said Marci Basich, Chief Financial Officer.  “The improvement was primarily driven by a reduction in funding costs as the weighted average cost of interest-bearing liabilities decreased by eight basis points during the quarter.  Total deposits decreased $17 million, or 1%, during the quarter, in part due to some larger customers ending the calendar year with lower balances, while total borrowings stayed unchanged at $20 million compared to the prior quarter end.”

    “While we experienced an increase in loan originations during the quarter, they were more than offset by a significant increase in loan payoffs, resulting in a 1% decrease in net loans compared to the prior quarter end,” Brydon continued.  “Some of the larger payoffs were on participation loans, as well as our largest substandard loan.  Credit quality metrics are also holding up relatively well.  While we experienced higher than normal net charge-offs during the quarter of $242,000 related to one loan, all other credit quality metrics improved.  Non-performing assets improved to 16 basis points of total assets at the end of the first quarter, compared to 20 basis points three months earlier, total delinquencies decreased by 10% during the quarter and non-accrual loans decreased by nearly 30%.  We remain encouraged by the overall strength of our loan portfolio and opportunities for loan growth in our markets.” 

    “During the quarter we were excited to partner with the Federal Home Loan Bank of Des Moines and their Member Impact Fund grant program.  Timberland applied for grants on behalf of 43 local non-profit organizations in our market areas and we were pleased that all were approved.  The Member Impact Fund provided $3 for every $1 we donated to an eligible non-profit organization in our community.  In total, $772,000 was donated to 43 local non-profit organizations.  We were thrilled to be a part of the grant program that helped make a positive impact and advance housing and community development needs in the communities we serve,” added Fischer.

    Earnings and Balance Sheet Highlights (at or for the periods ended December 31, 2024, compared to December 31, 2023, or September 30, 2024):

       Earnings Highlights:

    • Earnings per diluted common share (“EPS”) increased 9% to $0.86 for the current quarter from $0.79 for the preceding quarter and 12% from $0.77 for the comparable quarter one year ago;
    • Net income increased 8% to $6.86 million for the current quarter from $6.36 million for the preceding quarter and 9% from $6.30 million for the comparable quarter one year ago;
    • Return on average equity (“ROE”) and return on average assets (“ROA”) for the current quarter were 11.03% and 1.41%, respectively;
    • Net interest margin (“NIM”) for the current quarter expanded to 3.64% from 3.58% for the preceding quarter and 3.60% for the comparable quarter one year ago; and
    • The efficiency ratio for the current quarter improved to 56.27% from 56.79% for the preceding quarter and 56.50% for the comparable quarter one year ago.

      Balance Sheet Highlights:

    • Total assets decreased 1% from the prior quarter and increased 1% year-over-year;
    • Net loans receivable decreased 1% from the prior quarter and increased 6% year-over-year;
    • Total deposits decreased 1% from the prior quarter and increased slightly (less than 1%) year-over-year;
    • Total shareholders’ equity increased 2% from the prior quarter and increased 5% year-over-year; 27,260 shares of common stock were repurchased during the current quarter for $883,000;
    • Non-performing assets to total assets ratio was 0.16% at December 31, 2024 compared to 0.20% at September 30, 2024 and 0.18% at December 31, 2023;
    • Book and tangible book (non-GAAP) values per common share increased to $31.33 and $29.37, respectively, at December 31, 2024; and
    • Liquidity (both on-balance sheet and off-balance sheet) remained strong at December 31, 2024 with only $20 million in borrowings and additional secured borrowing line capacity of $656 million available through the Federal Home Loan Bank (“FHLB”) and the Federal Reserve.

    Operating Results

    Operating revenue (net interest income before the provision for credit losses plus non-interest income) for the current quarter increased 1% to $19.67 million from $19.48 million for the preceding quarter and increased 5% from $18.80 million for the comparable quarter one year ago.  The increase in operating revenue compared to the preceding quarter was primarily due to an increase in interest income from loans and a decrease in funding costs, which was partially offset by a decrease in non-interest income and decreases in interest income on investment securities and interest bearing deposits in banks.

    Net interest income increased $423,000, or 3%, to $16.97 million for the current quarter from $16.55 million for the preceding quarter and increased $966,000 or 6%, from $16.00 million for the comparable quarter one year ago.  The increase in net interest income compared to the preceding quarter was primarily due a $12.72 million increase in average total interest-earning assets and a decrease in the weighted average cost of interest-bearing liabilities to 2.62% from 2.70% for the preceding quarter.  Timberland’s NIM for the current quarter expanded to 3.64% from 3.58% for the preceding quarter and 3.60% for the comparable quarter one year ago.  The NIM for the current quarter was increased by approximately 3 basis points due to the collection of $115,000 in pre-payment penalties, non-accrual interest, and late fees and the accretion of $8,000 of the fair value discount on acquired loans.  The NIM for the preceding quarter was increased by approximately one basis point due to the collection of $20,000 in pre-payment penalties, non-accrual interest, and late fees, and the accretion of $7,000 of the fair value discount on acquired loans.  The NIM for the comparable quarter one year ago was increased by approximately three basis points due to the collection of $142,000 in pre-payment penalties, non-accrual interest, and late fees, and the accretion of $10,000 of the fair value discount on acquired loans.

    A $52,000 provision for credit losses on loans was recorded for the quarter ended December 31, 2024.  The provision was primarily due to changes in the composition of the loan portfolio and net charge-offs.  This compares to a $444,000 provision for credit losses on loans for the preceding quarter and a $379,000 provision for credit losses on loans for the comparable quarter one year ago.  In addition, a $20,000 recapture of credit losses on unfunded commitments and a $5,000 recapture of credit losses on investment securities were recorded for the current quarter. 

    Non-interest income decreased $235,000, or 8% to $2.70 million for the current quarter from $2.93 million for the preceding quarter and decreased $101,000, or 4%, from $2.80 million for the comparable quarter one year ago.  The decrease in non-interest income compared to the preceding quarter was primarily due to a decrease in gain on sales of loans and smaller changes in several other categories.  

    Total operating (non-interest) expenses for the current quarter increased $5,000, or less than 1%, to $11.07 million from $11.06 million for the preceding quarter and increased $443,000, or 4%, from $10.62 million for the comparable quarter one year ago.  The increase in operating expenses compared to the preceding quarter was primarily due to increases in salaries and employee benefits and smaller increases in several other expense categories.  These increases were partially offset by decreases in deposit operations expense, and smaller decreases in several other expense categories.  The efficiency ratio for the current quarter was 56.27% compared to 56.79% for the preceding quarter and 56.50% for the comparable quarter one year ago.  

    The provision for income taxes for the current quarter increased $141,000, or 9%, to $1.71 million from $1.57 million for the preceding quarter, primarily due to higher taxable income. Timberland’s effective income tax rate was 20.0% for the quarter ended December 31, 2024 compared to 19.8% for the quarter ended September 30, 2024 and 19.7% for the quarter ended December 31, 2023.  

    Balance Sheet Management

    Total assets decreased $14.00 million, or 1%, during the quarter to $1.91 billion at December 31, 2024 from $1.92 billion at September 30, 2024 and increased $14.37 million, or 1%, from $1.90 billion one year ago.  The decrease during the current quarter was primarily due to an $11.20 million decrease in investment securities, a $9.70 million decrease in net loans receivable and smaller decreases in several other categories.  These decreases were partially offset by smaller increases in several other asset categories. 

    Liquidity

    Timberland has continued to maintain a strong liquidity position, both on-balance sheet and off-balance sheet.  Liquidity, as measured by the sum of cash and cash equivalents, CDs held for investment, and available for sale investment securities, was 15.0% of total liabilities at December 31, 2024, compared to 14.7% at September 30, 2024, and 12.7% one year ago.  Timberland had secured borrowing line capacity of $656 million available through the FHLB and the Federal Reserve at December 31, 2024.  With a strong and diversified deposit base, only 19% of Timberland’s deposits were uninsured or uncollateralized at December 31, 2024.  (Note: This calculation excludes public deposits that are fully collateralized.)

    Loans

    Net loans receivable decreased $9.70 million, or 1%, during the quarter to $1.41 billion at December 31, 2024 from $1.42 billion at September 30, 2024.  This decrease was primarily due to a $15.47 million increase in the undisbursed portion of construction loans, a $3.43 million decrease in commercial business loans and a $2.17 million decrease in commercial real estate loans.  These decreases were partially offset by a $7.32 million increase in one- to four-family loans, a $1.55 million increase in construction loans and smaller increases in several other loan categories.

    Loan Portfolio
    ($ in thousands)

      December 31, 2024   September 30, 2024   December 31, 2023
      Amount   Percent   Amount   Percent   Amount   Percent  
    Mortgage loans:                        
       One- to four-family (a) $   306,443        20 %   $   299,123        20 %   $  263,122     18 %  
       Multi-family       177,861     12           177,350     11          147,321              10    
       Commercial       597,054     39           599,219     40          579,038             40    
       Construction – custom and                        
    owner/builder       124,104     8           132,101     9          134,878             9      
       Construction – speculative
                one-to four-family    		          8,887      1            11,495      1            17,609             1    
       Construction – commercial        22,841      2            29,463      2            36,702             3    
       Construction – multi-family        48,940      3            28,401      2            57,019             4    
       Construction – land                             
                development        15,977      1            17,741      1            18,878             1    
       Land        30,538      2            29,366      2            28,697             2    
    Total mortgage loans   1,332,645           88       1,324,259           88        1,283,264            88    
                             
    Consumer loans:                        
       Home equity and second                        
    mortgage        48,851     3            47,913     3           39,403              3    
       Other          2,889     —              3,129     —             2,926              —    
    Total consumer loans        51,740     3            51,042     3           42,329              3    
                             
    Commercial loans:                        
         Commercial business loans      135,312      9          138,743      9          136,942              9    
         SBA PPP loans            204      —                260      —                 423              —    
               Total commercial loans      135,516      9          139,003      9          137,365              9    
    Total loans   1,519,901      100 %     1,514,304      100 %      1,462,958     100 %  
    Less:                        
    Undisbursed portion of                        
    construction loans in                        
            process   (85,350 )         (69,878 )           (104,683 )      
    Deferred loan origination                        
    fees   (5,444 )         (5,425 )              (5,337 )      
    Allowance for credit losses   (17,288 )         (17,478 )             (16,655 )      
    Total loans receivable, net $   1,411,819         $     1,421,523         $ 1,336,283        

    _______________________
    (a)     Does not include one- to four-family loans held for sale totaling $411, $0, and $1,425 at December 31, 2024, September 30, 2024, and December 31, 2023, respectively. 

    The following table provides a breakdown of commercial real estate (“CRE”) mortgage loans by collateral type as of December 31, 2024:

    CRE Loan Portfolio Breakdown by Collateral
                 ($ in thousands)

    Collateral Type    

    Balance

    		   Percent of
    CRE
    Portfolio    		   Percent of
    Total Loan
    Portfolio    		   Average
    Balance Per
    Loan    		   Non-
    Accrual
    Industrial warehouse   $    126,435      21 %     8 %   $   1,228   $ 195
    Medical/dental offices     84,786   14     6       1,265     —
    Office buildings     67,600   11     4       768     —
    Other retail buildings     52,313    9     3       545     —
    Mini-storage     33,773    6     2       1,351     —
    Hotel/motel     32,367    5     2       2,697     —
    Restaurants     27,977    5     2       560     273
    Gas stations/conv. stores     24,881    4     2       1,037     —
    Churches     15,874    3     1       934     —
    Nursing homes     13,745    2     1       1,964     —
    Mobile home parks     10,694    2     1       465     —
    Shopping centers     10,648    2     1       1,774     —
    Additional CRE     95,961   16     6       706         230
         Total CRE   $    597,054   100 %   39 %   $      913   $    698

    Timberland originated $72.07 million in loans during the quarter ended December 31, 2024, compared to $48.82 million for the preceding quarter and $88.93 million for the comparable quarter one year ago.  Timberland continues to originate fixed-rate one- to four-family mortgage loans, a portion of which are sold into the secondary market for asset-liability management purposes and to generate non-interest income.  During the current quarter, fixed-rate one- to four-family mortgage loans totaling $2.31 million were sold compared to $5.62 million for the preceding quarter and $3.80 million for the comparable quarter one year ago.  

    Investment Securities
                                                
    Timberland’s investment securities and CDs held for investment decreased $13.93 million, or 5%, to $241.50 million at December 31, 2024, from $255.43 million at September 30, 2024.  The decrease was primarily due to maturities of U.S. Treasury investment securities (classified as held to maturity) and scheduled amortization.  Partially offsetting these decreases, was the purchase of additional U.S. government agency mortgage-backed investment securities and U.S. Treasury investment securities, all of which were classified as available for sale.

    Deposits

    Total deposits decreased $17.25 million, or 1%, during the quarter to $1.63 billion at December 31, 2024, from $1.65 billion at September 30, 2024.  The quarter’s decrease consisted of a $15.51 million decrease in money market account balance, a $10.21 million decrease in non-interest bearing account balances, and a $9.92 decrease NOW checking account balances. These decreases were partially offset by a $17.53 million increase in certificate of deposit account balances and an $852,000 increase in savings account balances.

    Deposit Breakdown
    ($ in thousands)    		  
        December 31, 2024    September 30, 2024   December 31, 2023   
        Amount   Percent     Amount   Percent   Amount   Percent  
    Non-interest-bearing demand   $ 402,911      25 %     $ 413,116      25 %   $ 433,065      27 %  
    NOW checking     323,412   20       333,329   20       389,463   24    
    Savings     206,845   13       205,993   13       215,948   13    
    Money market     311,413   19       326,922   20       269,686   17    
    Certificates of deposit under $250     212,764   13       205,970   12       181,762   11    
    Certificates of deposit $250 and over     122,997   7       113,579   7       96,145   6    
    Certificates of deposit – brokered     50,074   3       48,759   3       41,000   2    
        Total deposits   $ 1,630,416   100 %     $ 1,647,668   100 %   $ 1,627,069   100 %  

    Borrowings

    Total borrowings were $20.00 million at both December 31, 2024 and September 30, 2024.  At December 31, 2024, the weighted average rate on the borrowings was 3.97%.

    Shareholders’ Equity and Capital Ratios

    Total shareholders’ equity increased $3.79 million, or 2%, to $249.20 million at December 31, 2024, from $245.41 million at September 30, 2024, and increased $11.83 million, or 5%, from $237.37 million at December 31, 2023.  The quarter’s increase in shareholders’ equity was primarily due to net income of $6.86 million, which was partially offset by the payment of $1.99 million in dividends to shareholders, an $812,000 change in the accumulated other comprehensive income (loss) category for fair value adjustments on available for sale investment securities, and the repurchase of 27,260 shares of common stock for $883,000 (an average price of $32.38 per share).  There were 127,906 shares available to be repurchased in accordance with the terms of its existing stock repurchase plan at December 31, 2024.

    Timberland remains well capitalized with a total risk-based capital ratio of 19.95%, a Tier 1 leverage capital ratio of 12.32%, a tangible common equity to tangible assets ratio (non-GAAP) of 12.34%, and a shareholders’ equity to total assets ratio of 13.05% at September 30, 2024.  Timberland’s held to maturity investment securities were $156.11 million at December 31, 2024, with a net unrealized loss of $8.44 million (pre-tax).  Although not permitted by U.S. Generally Accepted Accounting Principles (“GAAP”), including these unrealized losses in accumulated other comprehensive income (loss) (“AOCI”) would result in a ratio of shareholders’ equity to total assets of 12.75%, compared to 13.05%, as reported.

    Asset Quality

    Timberland’s non-performing assets to total assets ratio improved to 0.16% at December 31, 2024, compared to 0.20% at September 30, 2024 and 0.18% at December 31, 2023.  Net charge-offs totaled $242,000 for the current quarter compared to net charge-offs of $12,000 for the preceding quarter and net charge-offs of $2,000 for the comparable quarter one year ago.  During the current quarter, provisions for credit losses of $52,000 on loans were made, which was partially offset by a $20,000 recapture of credit losses on unfunded commitments and a $5,000 recapture of credit losses on investment securities.  The allowance for credit losses (“ACL”) for loans as a percentage of loans receivable was 1.21% at December 31, 2024, compared to 1.21% at September 30, 2024 and 1.23% one year ago.

    Total delinquent loans (past due 30 days or more) and non-accrual loans decreased $458,000 or 10%, to $4.02 million at December 31, 2024, from $4.49 million at September 30, 2024.  Non-accrual loans decreased $1.15 million, or 30%, to $2.73 million at December 31, 2024 from $3.89 million at September 30, 2024.  The quarterly decrease in non-accrual loans was primarily due to decreases in commercial business loans and commercial real estate loans on non-accrual status.

    Non-Accrual Loans
    ($ in thousands)

      December 31, 2024   September 30, 2024   December 31, 2023
      Amount   Quantity   Amount   Quantity   Amount   Quantity
    Mortgage loans:                      
         One- to four-family $       47   1   $    49   1   $    602   4
         Commercial   698   5     1,158   6     683   2
         Construction – custom and                      
              owner/builder   —   —     —   —     150   1
              Total mortgage loans   745   6     1,207   7     1,435   7
                           
    Consumer loans:                      
         Home equity and second                      
              mortgage   587   3     618   3     171   1
         Other   —   —     —   —     —   —
              Total consumer loans   587   3     618   3     171   1
                           
    Commercial business loans   1,401    11     2,060    8     1,760   6
    Total loans $ 2,733   20   $ 3,885   18   $ 3,366   14

               
    Timberland had two properties classified as other real estate owned (“OREO”) at December 31, 2024:

      December 31, 2024   September 30, 2024   December 31, 2023
      Amount   Quantity   Amount   Quantity   Amount   Quantity
    Other real estate owned:                      
         Commercial $ 221   1   $ —   —   $ —   —
         Land   —   1     —   1     —   1
              Total mortgage loans $ 221   2   $ —   1   $ —   1

                   

    About Timberland Bancorp, Inc.
    Timberland Bancorp, Inc., a Washington corporation, is the holding company for Timberland Bank.  The Bank opened for business in 1915 and primarily serves consumers and businesses across Grays Harbor, Thurston, Pierce, King, Kitsap and Lewis counties, Washington with a full range of lending and deposit services through its 23 branches (including its main office in Hoquiam).     

    Disclaimer

    Certain matters discussed in this press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These statements relate to our financial condition, results of operations, plans, objectives, future performance or business.  Forward-looking statements are not statements of historical fact, are based on certain assumptions and often include the words “believes,” “expects,” “anticipates,” “estimates,” “forecasts,” “intends,” “plans,” “targets,” “potentially,” “probably,” “projects,” “outlook” or similar expressions or future or conditional verbs such as “may,” “will,” “should,” “would” and “could.”  Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, assumptions and statements about future economic performance. These forward-looking statements are subject to known and unknown risks, uncertainties and other factors that could cause our actual results to differ materially from the results anticipated or implied by our forward-looking statements, including, but not limited to: potential adverse impacts to economic conditions in our local market areas, other markets where the Company has lending relationships, or other aspects of the Company’s business operations or financial markets, including, without limitation, as a result of employment levels, labor shortages and the effects of inflation, a potential recession or slowed economic growth; continuing elevated levels of inflation and the impact of current and future monetary policies of the Board of Governors of the Federal Reserve System (“Federal Reserve”) in response thereto; the effects of any federal government shutdown; credit risks of lending activities, including any deterioration in the housing and commercial real estate markets which may lead to increased losses and non-performing loans in our loan portfolio resulting in our ACL not being adequate to cover actual losses and thus requiring us to materially increase our ACL through the provision for credit losses; changes in general economic conditions, either nationally or in our market areas; changes in the levels of general interest rates, and the relative differences between short and long-term interest rates, deposit interest rates, our net interest margin and funding sources; fluctuations in the demand for loans, the number of unsold homes, land and other properties and fluctuations in real estate values in our market areas; secondary market conditions for loans and our ability to sell loans in the secondary market; results of examinations of us by the Federal Reserve and of our bank subsidiary by the Federal Deposit Insurance Corporation (“FDIC”), the Washington State Department of Financial Institutions, Division of Banks or other regulatory authorities, including the possibility that any such regulatory authority may, among other things, institute a formal or informal enforcement action against us or our bank subsidiary which could require us to increase our ACL, write-down assets, change our regulatory capital position or affect our ability to borrow funds or maintain or increase deposits or impose additional requirements or restrictions on us, any of which could adversely affect our liquidity and earnings; the impact of bank failures or adverse developments at other banks and related negative press about the banking industry in general on investor and depositor sentiment; legislative or regulatory changes that adversely affect our business including changes in banking, securities and tax law, in regulatory policies and principles, or the interpretation of regulatory capital or other rules; our ability to attract and retain deposits; our ability to control operating costs and expenses; the use of estimates in determining fair value of certain of our assets, which estimates may prove to be incorrect and result in significant declines in valuation; difficulties in reducing risks associated with the loans in our consolidated balance sheet; staffing fluctuations in response to product demand or the implementation of corporate strategies that affect our work force and potential associated charges; disruptions, security breaches, or other adverse events, failures or interruptions in, or attacks on, our information technology systems or on the third-party vendors who perform several of our critical processing functions; our ability to retain key members of our senior management team; costs and effects of litigation, including settlements and judgments; our ability to implement our business strategies; our ability to manage loan delinquency rates; increased competitive pressures among financial services companies; changes in consumer spending, borrowing and savings habits; the availability of resources to address changes in laws, rules, or regulations or to respond to regulatory actions; our ability to pay dividends on our common stock; the quality and composition of our securities portfolio and the impact if any adverse changes in the securities markets, including on market liquidity; inability of key third-party providers to perform their obligations to us; changes in accounting policies and practices, as may be adopted by the financial institution regulatory agencies or the Financial Accounting Standards Board (“FASB”), including additional guidance and interpretation on accounting issues and details of the implementation of new accounting methods; the economic impact of climate change, severe weather events, natural disasters, pandemics, epidemics and other public health crises, acts of war or terrorism, civil unrest and other external events on our business; other economic, competitive, governmental, regulatory, and technological factors affecting our operations, pricing, products and services; and other risks described elsewhere in this press release and in the Company’s other reports filed with or furnished to the Securities and Exchange Commission. 

    Any of the forward-looking statements that we make in this press release and in the other public statements we make are based upon management’s beliefs and assumptions at the time they are made.  We do not undertake and specifically disclaim any obligation to publicly update or revise any forward-looking statements included in this press release to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements or to update the reasons why actual results could differ from those contained in such statements, whether as a result of new information, future events or otherwise.  In light of these risks, uncertainties and assumptions, the forward-looking statements discussed in this document might not occur and we caution readers not to place undue reliance on any forward-looking statements. These risks could cause our actual results for fiscal 2025 and beyond to differ materially from those expressed in any forward-looking statements by, or on behalf of, us, and could negatively affect the Company’s consolidated financial condition and results of operations as well as its stock price performance.

    TIMBERLAND BANCORP INC. AND SUBSIDIARY
    CONSOLIDATED STATEMENTS OF INCOME    		   Three Months Ended
    ($ in thousands, except per share amounts) (unaudited)   Dec. 31,   Sept. 30,   Dec. 31,
         2024     2024     2023 
      Interest and dividend income            
      Loans receivable   $ 21,032     $ 20,589     $ 18,395  
      Investment securities     2,138       2,237       2,311  
      Dividends from mutual funds, FHLB stock and other investments     86       95       91  
       Interest bearing deposits in banks     2,001       2,114       1,699  
          Total interest and dividend income     25,257       25,035       22,496  
                   
      Interest expense            
      Deposits     8,084       8,277       6,143  
      Borrowings     203       211                  349  
           Total interest expense     8,287       8,488       6,492  
           Net interest income     16,970       16,547       16,004  
      Provision for credit losses – loans     52       444       379  
      Recapture of credit losses – investment securities     (5 )     (13 )     (10 )
      Prov. for (recapture of ) credit losses – unfunded commitments     (20 )     59       (33 )
          Net int. income after provision for (recapture of) credit losses     16,943       16,057       15,668  
                   
      Non-interest income            
      Service charges on deposits     999       1,037       1,023  
      ATM and debit card interchange transaction fees     1,267       1,293       1,264  
      Gain on sales of loans, net     43       135       78  
      Bank owned life insurance (“BOLI”) net earnings     167       175       156  
      Recoveries on investment securities, net        3          3          5  
      Other     218       289       272  
          Total non-interest income, net     2,697       2,932       2,798  
                   
      Non-interest expense            
      Salaries and employee benefits     6,092       5,867       5,911  
      Premises and equipment     950       933       973  
      Gain on sales/disposition of premises and equipment, net     —       1       —  
      Advertising     181       205       186  
      OREO and other repossessed assets, net     —       4       —  
      ATM and debit card processing     521       588       615  
      Postage and courier     121       137       126  
      State and local taxes     346       343       319  
      Professional fees     346       410       253  
      FDIC insurance     210       209       210  
      Loan administration and foreclosure     128       125       105  
      Technology and communications     1,140       1,163       974  
      Deposit operations     332       446       320  
      Amortization of core deposit intangible (“CDI”)     45       57       56  
      Other, net     655       574       576  
          Total non-interest expense, net     11,067       11,062       10,624  
                   
      Income before income taxes     8,573       7,927       7,842  
      Provision for income taxes     1,713       1,572       1,546  
          Net income   $   6,860     $   6,355     $   6,296  
                   
      Net income per common share:            
          Basic   $ 0.86     $ 0.80     $ 0.78  
          Diluted     0.86       0.79       0.77  
                   
      Weighted average common shares outstanding:            
          Basic     7,958,275       7,954,112       8,114,209  
          Diluted     7,999,504       7,995,024       8,166,048  
    TIMBERLAND BANCORP INC. AND SUBSIDIARY
    CONSOLIDATED BALANCE SHEETS    		  
    ($ in thousands, except per share amounts) (unaudited)   Dec. 31,   Sept. 30,   Dec. 31,
         2024     2024     2023 
    Assets            
    Cash and due from financial institutions   $     24,538     $     29,071     $     28,656  
    Interest-bearing deposits in banks     139,533            135,657       129,365  
      Total cash and cash equivalents     164,071       164,728       158,021  
                   
    Certificates of deposit (“CDs”) held for investment, at cost     7,470       10,209       12,449  
    Investment securities:            
      Held to maturity, at amortized cost (net of ACL – investment securities)     156,105       172,097       266,085  
      Available for sale, at fair value     77,080       72,257       40,446  
    Investments in equity securities, at fair value     840       866       848  
    FHLB stock     2,037       2,037       2,001  
    Other investments, at cost     3,000       3,000       3,000  
    Loans held for sale     411       —       1,425  
                 
    Loans receivable     1,429,107       1,439,001       1,352,938  
    Less: ACL – loans     (17,288 )     (17,478 )     (16,655 )
      Net loans receivable     1,411,819       1,421,523         1,336,283  
                   
    Premises and equipment, net     21,617       21,486       21,584  
    OREO and other repossessed assets, net     221       —       —  
    BOLI     23,777       23,611       23,122  
    Accrued interest receivable     7,095       6,990       6,731  
    Goodwill     15,131       15,131       15,131  
    CDI     406       451       621  
    Loan servicing rights, net     1,195       1,372       1,925  
    Operating lease right-of-use assets     1,400       1,475       1,698  
    Other assets     15,805       6,242       3,745  
      Total assets   $ 1,909,480     $ 1,923,475     $ 1,895,115  
                   
    Liabilities and shareholders’ equity            
    Deposits: Non-interest-bearing demand   $  402,911     $   413,116     $   433,065  
    Deposits: Interest-bearing     1,227,505       1,234,552       1,194,004  
      Total deposits     1,630,416       1,647,668       1,627,069  
                   
    Operating lease liabilities     1,501       1,575       1,796  
    FHLB borrowings     20,000       20,000       20,000  
    Other liabilities and accrued expenses     8,364       8,819       8,881  
      Total liabilities     1,660,281       1,678,062       1,657,746  
                 
    Shareholders’ equity            
    Common stock, $.01 par value; 50,000,000 shares authorized;
            7,954,673 shares issued and outstanding – December 31, 2024
            7,960,127 shares issued and outstanding – September 30, 2024
            8,120,708 shares issued and outstanding – December 31, 2023                             		      

    29,593

    		        

    29,862

    		        

    34,869

    		  
    Retained earnings     220,398       215,531       203,327  
    Accumulated other comprehensive income (loss)     (792 )     20       (827 )
      Total shareholders’ equity     249,199       245,413       237,369  
      Total liabilities and shareholders’ equity   $ 1,909,480     $ 1,923,475     $ 1,895,115  
      Three Months Ended                 
    PERFORMANCE RATIOS:   Dec. 31,
    2024    		   Sept. 30,
    2024    		   Dec. 31,
    2023
    Return on average assets (a)     1.41 %     1.32 %     1.36 %
    Return on average equity (a)     11.03 %     10.43 %     10.75 %
    Net interest margin (a)     3.64 %     3.58 %     3.60 %
    Efficiency ratio     56.27 %     56.79 %     56.50 %
                 
    ASSET QUALITY RATIOS AND DATA:            
    Non-accrual loans   $ 2,733     $ 3,885     $ 3,366  
    Loans past due 90 days and still accruing     —       —       —  
    Non-performing investment securities     45       51       85  
    OREO and other repossessed assets     221       —       —  
    Total non-performing assets (b)   $ 2,999     $ 3,936     $ 3,451  
                 
    Non-performing assets to total assets (b)     0.16 %     0.20 %     0.18 %
    Net charge-offs during quarter   $         242      $         12     $         2  
    Allowance for credit losses – loans to non-accrual loans     633 %     450 %     495 %
    Allowance for credit losses – loans to loans receivable (c)     1.21 %     1.21 %     1.23 %
                 
                 
    CAPITAL RATIOS:            
    Tier 1 leverage capital     12.32 %     12.12 %     12.14 %
    Tier 1 risk-based capital     18.69 %     18.14 %     18.22 %
    Common equity Tier 1 risk-based capital                 18.69 %          18.14 %     18.22 %
    Total risk-based capital     19.95 %     19.39 %     19.50 %
    Tangible common equity to tangible assets (non-GAAP)     12.34 %     12.05 %     11.79 %
                 
    BOOK VALUES:            
    Book value per common share   $   31.33      $   30.83      $ 29.23  
    Tangible book value per common share (d)     29.37       28.87       27.29  

    ________________________________________________

    (a)  Annualized
    (b)  Non-performing assets include non-accrual loans, loans past due 90 days and still accruing, non-performing investment securities and OREO and other repossessed assets. 
    (c)  Does not include loans held for sale and is before the allowance for credit losses.
    (d)  Tangible common equity divided by common shares outstanding (non-GAAP).                                                                                                 

    AVERAGE BALANCES, YIELDS, AND RATES – QUARTERLY
    ($ in thousands)
    (unaudited)

      For the Three Months Ended 
      December 31, 2024    September 30, 2024    December 31, 2023 
      Amount   Rate   Amount   Rate   Amount       Rate
                           
    Assets                      
    Loans receivable and loans held for sale $       1,438,144     5.80 %   $     1,428,125     5.74 %   $      1,332,971     5.52 %
    Investment securities and FHLB stock (1)   247,236      3.57       254,567      3.64            317,164      3.03  
    Interest-earning deposits in banks and CDs      166,764      4.76          156,732      5.37          126,253      5.38  
         Total interest-earning assets       1,852,144      5.42           1,839,424      5.41           1,776,388      5.07  
    Other assets        75,534                80,940                81,612      
         Total assets $      1,927,678         $     1,920,364         $      1,858,000      
                           
    Liabilities and Shareholders’ Equity                      
    NOW checking accounts $          328,455      1.38 %   $        337,955      1.40 %   $          376,682      1.51 %
    Money market accounts      324,424      3.42          321,151      3.62       224,939      2.34  
    Savings accounts   205,650      0.28       207,457      0.27       220,042      0.22  
    Certificates of deposit accounts   331,785      4.09       316,897      4.20       268,628      3.97  
    Brokered CDs   46,414      4.98       48,719      5.54       42,725      5.38  
       Total interest-bearing deposits   1,236,728      2.59       1,232,179      2.67       1,133,016      2.18  
    Borrowings   20,000      4.03       20,000      4.20       28,804      4.81  
       Total interest-bearing liabilities   1,256,728      2.62       1,252,179      2.70       1,161,820      2.22  
                           
    Non-interest-bearing demand deposits   414,149           414,603           450,027      
    Other liabilities            10,146                    11,151           11,878      
    Shareholders’ equity   246,655           242,431           234,275      
         Total liabilities and shareholders’ equity $     1,927,678         $     1,920,364         $     1,858,000      
                           
         Interest rate spread     2.80 %       2.71 %       2.85 %
         Net interest margin (2)     3.64 %       3.58 %       3.60 %
         Average interest-earning assets to                      
         average interest-bearing liabilities   147.38 %         146.90 %         152.90 %    

              _____________________________________
    (1) Includes other investments
    (2) Net interest margin = annualized net interest income /
         average interest-earning assets
                   

    Non-GAAP Financial Measures
    In addition to results presented in accordance with GAAP, this press release contains certain non-GAAP financial measures.  Timberland believes that certain non-GAAP financial measures provide investors with information useful in understanding the Company’s financial performance; however, readers of this report are urged to review these non-GAAP financial measures in conjunction with GAAP results as reported.

    Financial measures that exclude intangible assets are non-GAAP measures.  To provide investors with a broader understanding of capital adequacy, Timberland provides non-GAAP financial measures for tangible common equity, along with the GAAP measure.  Tangible common equity is calculated as shareholders’ equity less goodwill and CDI.  In addition, tangible assets equal total assets less goodwill and CDI.

    The following table provides a reconciliation of ending shareholders’ equity (GAAP) to ending tangible shareholders’ equity (non-GAAP) and ending total assets (GAAP) to ending tangible assets (non-GAAP).

    ($ in thousands)   December 31, 2024   September 30, 2024   December 31, 2023
                 
    Shareholders’ equity   $                 249,199     $                 245,413     $                    237,369  
    Less goodwill and CDI     (15,537 )     (15,582 )     (15,752 )
    Tangible common equity   $                 233,662     $                 229,831     $                    221,617  
                 
    Total assets   $              1,909,480     $              1,923,475     $                1,895,115  
    Less goodwill and CDI     (15,537 )     (15,582 )     (15,752 )
    Tangible assets   $              1,893,943     $              1,907,893     $                1,879,363  

    The MIL Network –

  • MIL-OSI Submissions: Australia Economy – WA tops economic leaderboard as Queensland rises up the ranks: CommSec State of the States – CBA

    Source: Commonwealth Bank of Australia (CBA)

    WA leads on five of eight economic indicators as Australian state economies remain resilient in the face of higher interest rates and inflation pressures.

    Western Australia has held off a fast-finishing Queensland to claim top spot as the country’s best performing economy for the second quarter in a row in the latest CommSec State of the States report.

    Now in its 16th year, the State of the States report determines which state or territory economy is performing best, by tracking eight key economic indicators and comparing the latest data with decade averages (or the “normal”).

    Western Australia led the national performance rankings for the second time in a decade, ranked first on five of the eight economic indicators.

    In a closely fought contest, Queensland moved up from third spot, joining South Australia in second spot. Victoria remains in fourth place, with Tasmania steady in fifth place.

    NSW leapfrogged the ACT into sixth from seventh place, with the nation’s capital slipping back to seventh. The Northern Territory remains in eighth spot.

    “Overall, economies have slowed in response to higher interest rates and inflation, however Australian states and territories are proving resilient due to a strong job market and solid population growth. As consumers respond to higher borrowing costs and price pressures, the future path will depend on whether the job market can hold up as well as the trajectory of interest rates over the coming months,” Chief CommSec Economist Ryan Felsman said

    “Western Australia’s performance across a number of indicators, namely retail spending, unemployment, population growth, housing finance and dwelling starts powered the state to the top of our economic leaderboard for the second quarter in a row. Queensland however is nipping at WA’s heels, having shot up to equal second place alongside South Australia, with solid results across the eight economic indicators and strong economic momentum. As expected, the interest-rate sensitive south-eastern states remained in a tight cluster mid-table.”

    Additional state and territory highlights include:

    Western Australia ranks first on retail spending, relative unemployment, relative population growth, housing finance and dwelling starts.
    Queensland is now equal second, up from third place, with solid results across the board. South Australia, now joint second, ranks first on economic growth.
    Victoria remains in fourth place – leading on construction work done – and is in fourth spot on two indicators.
    Tasmania is steady in fifth spot — ranking second on equipment spending — but is held back by lower rankings on other indicators.
    NSW moves up to sixth from seventh position and now ranks fifth on four indicators. The ACT has slipped back to seventh — in that position on four indicators.
    The Northern Territory remains in last place. But the “Top End” has performed better over the past 12 months, ranking first for retail spending and equipment investment when annual growth rates are considered.

    Annual growth rates

    The State of the States report also compares the annual growth rates of the eight major indicators, enabling comparisons in terms of more recent economic momentum. This quarter’s report showed:

    Resources-focused Queensland and Western Australia both have the strongest annual economic momentum, and Queensland is now in first spot with Western Australia slipping to second.
    There is little to separate the states with Queensland ranked first or second on five out of the eight key economic indicators. Western Australia is top ranked on three indicators.
    The biggest mover is Victoria, which has jumped to third from seventh place in a sign of improvement in underlying economic activity.  
    South Australia has ascended to fourth from sixth place.
    The Northern Territory has eased back to fifth from third spot. The ACT and NSW are now in joint sixth position, ahead of Tasmania in eighth spot – all held back by higher borrowing costs and slower population growth.

    About the CommSec State of the States Report

    The January 2025 edition of the State of the States report uses the most recent economic data available. While population growth data relates to the June quarter of 2024, other data – such as unemployment – is much timelier, covering the month of December 2024, with housing finance figures focusing on the month of September 2024.

    CommSec, the digital broking arm of Australia’s largest bank, assesses the performance of each state and territory on a quarterly basis using eight key indicators. Those indicators include economic growth, retail spending, equipment investment, unemployment, construction work done, population growth, housing finance, and dwelling commencements.

    Just as the Reserve Bank of Australia (RBA) uses long-term averages to determine the level of “normal” interest rates, CommSec compares the key indicators to decade averages; that is, against “normal” performance.

    CommSec also compares annual growth rates for eight key indicators for all states and territories, in addition to Australia as a whole, enabling a comparison of economic momentum.

    MIL OSI – Submitted News –

  • MIL-OSI: Capital Bancorp, Inc. Announces 4Q and Full Year 2024 Results; Successful Close of the IFH Acquisition; Robust Organic Loan and Deposit Growth; Diversified Business Model Drives Strong Performance

    Source: GlobeNewswire (MIL-OSI)

    Fourth Quarter 2024 Results

    • Net Income of $7.5 million, or $0.45 per share, and return on average assets of 0.96%
      • Net Income of $15.5 million, or $0.92 per share, and return on average assets of 1.97% as adjusted to exclude the impact of merger-related expenses, initial Integrated Financial Holdings, Inc. (“IFH”) Allowance for Credit Losses (“ACL”) provision, and a non-recurring legacy IFH equity and debt investment write-down (non-GAAP)(1)
    • Tangible Book Value Per Share(1) of $18.77, decreased 6.8%, or $1.36 as compared to $20.13 (3Q 2024), resulting from the acquisition of IFH and related purchase accounting impacts
    • Return on average equity of 8.50%, and return on average tangible common equity(1) of 9.47%
      • Core return on average equity(1) of 17.68%, and core return on average tangible common equity(1) of 19.19%
    • Net Interest Income increased $6.0 million, or 15.6% (not annualized), from 3Q 2024
    • Net Interest Margin (“NIM”) decreased to 5.87% as compared to 6.41% (3Q 2024)
      • Core NIM, as adjusted to exclude the impact of credit card loans (non-GAAP)(1) decreased to 4.05% as compared to 4.08% (3Q 2024)
      • Net purchase accounting accretion of $0.7 million for 4Q 2024 accounted for 9 basis points of the reported 5.87% NIM and 10 basis points of the reported 4.05% core NIM, respectively
    • Fee Revenue (noninterest income) totaled $11.9 million, or 21.2% of total revenue for 4Q 2024
      • Core Fee Revenue of $14.5 million, or 24.7% of total core revenue, increased $7.9 million from 3Q 2024, excluding a non-recurring equity and debt investment write-down of $2.6 million (non-GAAP)(1), primarily due to the acquisition of IFH
    • Gross Loan Growth in the quarter of $522.6 million includes $373.5 million from the acquisition of IFH, and $149.1 million from organic growth, or 28.2% annualized for 4Q 2024
      • Commercial and industrial loans of $554.6 million, or 21.0% of total gross loans at December 31, 2024 increased $282.7 million from September 30, 2024
    • Total Deposit Growth in the quarter of $575.7 million includes $459.0 million from the acquisition of IFH, and $116.7 million from organic growth, or 21.2% annualized for 4Q 2024
      • Noninterest bearing deposits increased $92.8 million, or 51.4% annualized from 3Q 2024
    • The ratio of allowance for credit losses to total loans equaled 1.85% at December 31, 2024 including 1.44% for the legacy Capital Bank portfolio, down 7 basis points from 3Q. The additional ACL coverage results from the initial $15.5 million impact from the acquisition of the IFH portfolio.
    • Cash Dividend of $0.10 per share declared by the Board of Directors

    ROCKVILLE, Md., Jan. 27, 2025 (GLOBE NEWSWIRE) — Capital Bancorp, Inc. (the “Company”) (NASDAQ: CBNK), the holding company for Capital Bank, N.A. (the “Bank”), today reported net income of $7.5 million, or $0.45 per diluted share, for the fourth quarter 2024, compared to net income of $8.7 million, or $0.62 per diluted share, for the third quarter 2024, and $9.0 million, or $0.65 per diluted share, for the fourth quarter 2023. On October 1, 2024, the Company successfully completed its previously announced merger with IFH. Net income for the fourth quarter 2024 would have been $15.5 million, or $0.92 per diluted share if adjusted to exclude the impact of merger-related expenses, the initial IFH ACL provision, and a non-recurring equity and debt investment write down (non-GAAP)(1), compared to $9.2 million, or $0.66 per diluted share, for the third quarter 2024.

    The Company also declared a cash dividend on its common stock of $0.10 per share. The dividend is payable on February 26, 2025 to shareholders of record on February 10, 2025.

    “We are pleased to have successfully closed our acquisition of Integrated Financial Holdings, and we are now focused on merger integration and executing on the opportunities from our complementary lines of business,” said Ed Barry, CEO of the Company and the Bank. “We continue to benefit from our diversified business model which is driving growth across our platforms.”

    “The really strong performance of the commercial bank during the quarter was highlighted by record loan growth, solid deposit growth, and stable core net interest margin. I am particularly pleased by the growth of our commercial and industrial loans,” said Steven J. Schwartz, Chairman of the Company. “This outstanding organic growth is expected to continue to be a major contributing factor in our overall earnings growth in 2025 and beyond. The acquisition of IFH, while creating a lot of noise in the financial results of the 4th quarter, provides us with a new line of business – loan servicing, processing, and packaging – and a significant expansion of our government-guaranteed lending platform.”

    (1) Reconciliations of the non–U.S. generally accepted accounting principles (“GAAP”) measures are set forth in the Appendix at the end of this press release.

    Acquisition of Integrated Financial Holdings, Inc.
    On October 1, 2024, the Company successfully completed its previously announced merger with IFH. Pursuant to the terms of the Merger Agreement, each share of IFH’s common stock, par value $1.00 per share (“IFH Common Stock”) was converted into the right to receive (a) 1.115 shares of common stock of the Company, par value $0.01 per share (“Capital Common Stock”); and (b) $5.36 in cash per share of IFH Common Stock held immediately prior to the Effective Time, in addition to cash in lieu of fractional shares. In addition, each stock option granted by IFH to purchase shares of IFH Common Stock, whether vested or unvested, outstanding immediately prior to the Effective Time, was assumed by the Company and converted into an equivalent option to purchase Capital Common Stock, with the same terms and conditions as applied to the IFH stock option.

    Total assets, including purchase accounting adjustments, of $559.4 million acquired in connection with the IFH acquisition included gross loans of $373.5 million, loans held for sale of $41.7 million and total deposits of $459.0 million at October 1, 2024.

    During 2024, the Company incurred pre-tax merger-related expenses of $3.9 million, including expenses totaling $2.6 million for the fourth quarter 2024, generally consistent with modeled expectations.

    The fourth quarter earnings were also impacted by pre-tax provision credit losses on acquired loans of $4.2 million (“Initial IFH ACL Provision”) along with a non-recurring $2.6 million write-down of a legacy IFH equity and debt investment in a start-up. The net remaining value of the equity and debt investment is $0.2 million at December 31, 2024.

    The following table provides a reconciliation of the Company’s net income under GAAP to non-GAAP results excluding merger-related expenses, Initial IFH ACL Provision, and the non-recurring equity and debt write-down.

      Fourth Quarter 2024   Third Quarter 2024
    (in thousands, except per share data) Income Before Income Taxes   Income Tax Expense   Net Income   Diluted Earnings per Share   Income Before Income Taxes   Income Tax Expense(Benefit)   Net Income   Diluted Earnings per Share
    GAAP Earnings $ 10,776     $ 3,243     $ 7,533     $ 0.45     $ 11,499     $ 2,827     $ 8,672     $ 0.62  
    Add: Merger-Related Expenses   2,615       464       2,151           520       (37 )     557      
    Add: Non-recurring Equity and Debt Investment Write-Down   2,620       —       2,620           —       —       —      
    Add: Initial IFH ACL Provision   4,194       1,025       3,169           —       —       —      
    Non-GAAP Earnings $ 20,205     $ 4,732     $ 15,473     $ 0.92     $ 12,019     $ 2,790     $ 9,229     $ 0.66  
      Year Ended December 31, 2024
    (in thousands, except per share data) Income Before Income Taxes   Income Tax Expense   Net Income   Diluted Earnings per Share
    GAAP Earnings $ 41,832     $ 10,860     $ 30,972     $ 2.11  
    Add: Merger-Related Expenses   3,930       622       3,308      
    Add: Non-recurring Equity and Debt Investment Write-Down   2,620       —       2,620      
    Add: Initial IFH ACL Provision   4,194       1,025       3,169      
    Non-GAAP Earnings $ 52,576     $ 12,507     $ 40,069     $ 2.73  
                                   

    Note: The tax benefit associated with merger-related expenses has been adjusted to reflect the estimated nondeductible portion of the expenses.

    Fourth Quarter 2024 Highlights

    Earnings Summary

    Net income of $7.5 million, or $0.45 per diluted share, decreased $1.1 million compared to $8.7 million, or $0.62 per diluted share, for the third quarter 2024. Net income of $15.5 million, or $0.92 per diluted share, as adjusted to exclude the impact of merger-related expenses, Initial IFH ACL Provision and a $2.6 million non-recurring equity and debt investment write-down (non-GAAP)(1) for the fourth quarter 2024 compared to $9.2 million, or $0.66 per diluted share, for the third quarter 2024.

    • Net interest income of $44.3 million increased $6.0 million, or 15.6%, compared to the third quarter 2024.
      • Interest income of $61.7 million increased $9.1 million, or 17.3%, over the third quarter 2024, primarily from $7.9 million in portfolio loan interest income, as growth in average balances increased $539.3 million. Interest income from interest-bearing deposits held at other financial institutions increased $0.3 million, as average balances increased $49.1 million to $140.2 million. Interest income included $0.7 million from net purchase accounting amortization.
      • Interest expense of $17.4 million increased $3.1 million, or 21.9% over the third quarter 2024 due to increases in time deposits and borrowed funds of $2.7 million and $0.6 million, respectively, offset by a decrease in customer money market deposits of $0.3 million. Average balances increased $367.8 million, $53.5 million and $65.3 million, respectively. Interest expense included $1.4 million from net purchase accounting accretion.
    • The provision for credit losses was $7.8 million, an increase of $4.1 million from the third quarter 2024, which included the Initial IFH ACL Provision of $4.2 million, $2.4 million from organic commercial portfolio loan growth and $1.2 million from OpenSky provision in the quarter. Net charge-offs totaled $2.4 million, a $0.2 million decrease over the third quarter 2024, including $2.1 million from credit card related loans. At December 31, 2024, the allowance for credit losses to total loans ratio was 1.85%, up 34 basis points from the ratio at September 30, 2024 due to the initial purchase credit deteriorated (“PCD”) credit mark and initial non-PCD ACL provision. Excluding IFH, legacy Capital Bank ACL coverage ratio was 1.44%, a decrease of 7 basis points from the third quarter 2024.

    Earnings Summary (Continued)

    • Noninterest income of $11.9 million increased $5.3 million as compared to the third quarter 2024 primarily due to contributions from the IFH acquisition. Government loan servicing revenue (Windsor) totaled $4.0 million, government lending revenue totaled $2.3 million and loan servicing rights totaled $1.0 million, offset by a non-recurring equity and debt write-down of $2.6 million related to an IFH investment. Other income increased $1.0 million including $0.9 million related to an investment in an SBIC, while credit card fees declined $0.3 million.
    • Noninterest expense of $37.5 million increased $7.8 million as compared to the third quarter 2024, primarily from the IFH acquisition. Noninterest expense of $34.9 million, excluding merger-related expenses of $2.6 million, increased $5.7 million as compared to the third quarter 2024. Highlights include:
      • The fourth quarter 2024 includes $0.3 million of intangible amortization resulting from the transaction.
      • Salaries and employee benefits expenses of $16.5 million increased $3.2 million, primarily related to the acquisition of IFH.
      • Occupancy and equipment expenses of $3.0 million increased $1.2 million, primarily related to increased contract expense from the IFH acquisition of $0.5 million and software depreciation of $0.4 million.
      • Estimated total cost synergies resulting from the acquisition totaled $1.5 million in the fourth quarter 2024, generally consistent with modeled expectations.
    • Income tax expense of $3.2 million, or 30.1% of pre-tax income for the fourth quarter 2024, increased $0.4 million from $2.8 million, or 24.6% of pre-tax income for the third quarter 2024. The elevated tax rate in the quarter resulted from non-deductibility of an equity and debt write-down along with some merger-related expenses. Excluding merger-related expenses and the non-recurring equity and debt write-down, the effective income tax rate for the fourth quarter 2024 would have been 22.6%.

    Balance Sheet

    Total assets of $3.2 billion at December 31, 2024 increased $646.1 million, or 25.2% (not annualized), from September 30, 2024. Total assets, including $559.4 million acquired with the IFH acquisition, net of purchase accounting, included gross loans of $373.5 million, loans held for sale of $41.7 million and total deposits of $459.0 million at October 1, 2024.

    • Cash and cash equivalents of $205.3 million at December 31, 2024 increased $48.6 million from September 30, 2024.
    • Total portfolio loans of $2.6 billion at December 31, 2024 increased $522.6 million, or 24.8% (not annualized) from September 30, 2024. Total average loans increased $539.3 million quarter over quarter.
      • Owner-occupied commercial real estate loans increased $88.6 million, or 25.2% (not annualized) from September 30, 2024.
      • The average portfolio loans-to-deposit ratio of 99.27% for the three months ended December 31, 2024 remained stable.
    • Total deposits of $2.8 billion at December 31, 2024 increased $575.7 million, or 26.3% (not annualized), from September 30, 2024. The increase includes $190.6 million of customer time deposits, $92.8 million of noninterest-bearing deposits primarily related to growth in title company deposit balances, $130.2 million of growth in customer money market deposits and $180.0 million of growth in brokered time deposits, partially offset by a decrease in interest-bearing demand accounts of $27.6 million.
      • Insured and protected deposits were approximately $1.6 billion as of December 31, 2024, representing 57.1% of the Company’s deposit portfolio.
      • Low and no interest bearing deposits of $1.1 billion, 38.5% of deposits, increased $74.9 million, or 7.6% (not annualized) from September 30, 2024. Average noninterest-bearing deposits of $729.9 million increased $49.2 million, or 7.2% (not annualized), and represented 27.9% of total average deposits at December 31, 2024.
    • The investment securities portfolio continues to be classified as available-for-sale and had a fair market value of $223.6 million, or 7.0% of total assets, an effective duration of 3.0 years, with U.S. Treasury Securities representing 57% of the overall investment portfolio at December 31, 2024. The accumulated other comprehensive income (loss) on the investment securities portfolio increased $2.9 million during the quarter to ($11.5 million) as of December 31, 2024, which represents 3.2% of total stockholders’ equity. The Company does not have a held-to-maturity investment securities portfolio.
    • Liquidity – The Company maintains stable and reliable sources of available borrowings, generally consistent with prior quarter. Sources of available borrowings at December 31, 2024 totaled $803.0 million, including available collateralized lines of credit of $595.7 million, unsecured lines of credit with other banks of $76.0 million and unpledged investment securities available as collateral for potential additional borrowings of $131.4 million.
    • Capital Positions – As of December 31, 2024, the Company reported a common equity tier 1 capital ratio of 13.74%, compared to 14.78% at September 30, 2024. At December 31, 2024, the Company and the Bank maintain regulatory capital ratios that exceed all capital adequacy requirements.

    Financial Metrics

    Net Interest Margin – Net interest margin decreased 54 basis points to 5.87% for the three months ended December 31, 2024, compared to prior quarter. Core net interest margin, as adjusted to exclude the impact of OpenSky™ credit card loans (non-GAAP)(1), decreased 3 basis points to 4.05% as compared to prior quarter. Net purchase accounting accretion for the fourth quarter 2024 was 9 basis points and 10 basis points for NIM and core NIM, respectively.

    • The average yield on interest earning assets of 8.17% decreased 62 basis points compared to the prior quarter, including 40 basis points from inclusion of IFH commercial assets. The yield on portfolio loans, as adjusted to exclude the impact of OpenSky™ credit card loans (non-GAAP)(1), of 6.98% for the fourth quarter 2024, decreased 17 basis points, primarily as a consequence of reduced market interest rates.
    • The total cost of deposits decreased 14 basis points to 2.50% for the fourth quarter 2024 as compared to the prior quarter. The total cost of interest-bearing deposits decreased 46 basis points to 3.46% for the fourth quarter 2024 as compared to the prior quarter.

    Efficiency Ratios – The efficiency ratio was 66.7% for the three months ended December 31, 2024, compared to 66.1% for the three months ended September 30, 2024. The efficiency ratio was 59.3%, as adjusted to exclude the impact of merger-related expenses and a non-recurring equity and debt investment write-down (non-GAAP)(1), for the three months ended December 31, 2024 compared to 64.9% for the three months ended September 30, 2024.

    Credit Metrics and Asset Quality – The ratio of allowance for credit losses to total loans equaled 1.85% at December 31, 2024, an increase of 34 basis points from September 20, 2024, which includes a 1.44% ACL coverage ratio for the legacy Capital Bank portfolio, down 7 basis points from 3Q. The additional ACL coverage results from the initial $15.5 million reserve on the $373.5 million IFH loan portfolio. Underlying credit performance and metrics were relatively stable and consistent with prior quarter when excluding the impact of the combination with IFH.

    Nonperforming assets increased 34 basis points to 0.94% of total assets at December 31, 2024 as compared to September 30, 2024. Total nonaccrual loans at December 31, 2024 increased $14.8 million to $30.2 million compared to September 30, 2024. At December 31, 2024, special mention loans totaled $60.0 million, or 2.3% of total portfolio loans, as compared to $20.3 million, or 1.0% of total portfolio loans, at September 30, 2024. At December 31, 2024, substandard loans totaled $48.4 million, or 1.8% of total portfolio loans, as compared to $23.8 million, or 1.1% of total portfolio loans, at September 30, 2024.

    Performance Ratios – Annualized return on average assets (“ROAA”) and annualized return on average equity (“ROAE”), and ROATCE were 0.96%, 8.50%, and 9.47% respectively, for the three months ended December 31, 2024, compared to 1.42%, 12.59%, and 12.59% respectively, for the three months ended September 30, 2024.

    • Annualized ROAA, annualized ROAE, and annualized ROATCE were 1.97%, 17.46%, and 19.19% respectively, as adjusted to exclude the impact of merger-related expenses, Initial IFH ACL Provision, and a non-recurring equity and debt investment write-down (non-GAAP)(1), for the three months ended December 31, 2024, compared to 1.51%, 13.40%, and 13.40% respectively, for the three months ended September 30, 2024.

    Tangible Book Value – Book value per common share of $21.31 at December 31, 2024 increased $1.19 when compared to September 30, 2024. Tangible book value per common share(1) decreased $1.36, or 6.8%, to $18.77 at December 31, 2024 when compared to September 30, 2024. Tangible book value was impacted by the purchase accounting adjustments made in consequence of the IFH acquisition. The Company did not have goodwill or other intangible assets prior to the fourth quarter 2024. Therefore, tangible book value per share(1) was equal to book value per share for periods prior to the fourth quarter 2024.

    Commercial Bank

    Continued Portfolio Loan Growth – Gross portfolio loans, excluding OpenSky™ credit card loans, increased $522.9 million, to $2.5 billion, at December 31, 2024 compared to September 30, 2024.

    The $522.9 million gross portfolio loan growth includes commercial real estate loans of $156.4 million, residential real estate loans of $64.9 million and commercial and industrial loans of $282.7 million. Historical gross portfolio loan balances are disclosed in the Composition of Loans table within the Historical Financial Highlights.

    Net Interest Income – Interest income of $45.2 million increased $9.4 million from prior quarter, driven by loan growth and higher loan yields. Interest expense of $17.1 million increased $3.1 million, driven by an increase in average balances in the fourth quarter 2024.

    Credit Metrics – Nonperforming assets, comprised solely of nonaccrual loans, increased 34 basis point to 0.94% of total assets at December 31, 2024 compared to September 30, 2024. Total nonaccrual loans at December 31, 2024 increased to $30.2 million compared to $15.5 million at September 30, 2024 due primarily to the acquisition of IFH.

    Classified and Criticized Loans – At December 31, 2024, special mention loans totaled $60.0 million, or 2.3% of total portfolio loans, as compared to $20.3 million, or 1.0% of total portfolio loans, at September 30, 2024. At December 31, 2024, substandard loans totaled $48.4 million, or 1.8% of total portfolio loans, as compared to $23.8 million, or 1.1% of total portfolio loans, at September 30, 2024.

    OpenSky™

    Revenues – Total revenue of $19.2 million decreased $0.5 million from the prior quarter. Interest income of $15.5 million decreased $0.2 million from the prior quarter. Average OpenSky™ credit card loan balances, net of reserves and deferred fees of $121.0 million for the fourth quarter 2024, increased $1.5 million, or 1.3% (not annualized), compared to prior quarter. Noninterest income of $3.7 million decreased $0.4 million as compared to the prior quarter, primarily related to lower annual fee income.

    Noninterest Expense – Total noninterest expense of $12.6 million decreased $0.7 million, primarily related to a reduction in quarterly advertising expense.

    Loan and Deposit Balances – Loan balances, net of reserves, of $127.8 million at December 31, 2024 increased by $0.7 million, or 0.5%, compared to $127.1 million at September 30, 2024. Corresponding deposit balances of $166.4 million at December 31, 2024 decreased $4.4 million, or 2.6%, compared to $170.8 million at September 30, 2024. Gross unsecured loan balances of $42.4 million at December 31, 2024 increased $2.7 million, or 6.8%, compared to $39.7 million at September 30, 2024. During the fourth quarter 2024, the number of credit card accounts increased by 3,614 to 552,566 from September 30, 2024.

    OpenSky™Credit – Portfolio credit metrics continue to be generally consistent with modeled expectations during the fourth quarter 2024. The provision for credit losses of $1.2 million decreased $1.1 million when compared to the prior quarter.

    Capital Bank Home Loans

    Originations of loans held for sale totaled $90.0 million during the fourth quarter, with $77.4 million of mortgage loans sold resulting in a gain on sale of loans of $1.9 million, representing a 2.45% of gain on sale as a percentage of total loans sold.

    Windsor Advantage

    Windsor Advantage is a loan service provider that offers community banks and credit unions with a comprehensive outsourced U.S. Small Business Association (“SBA”) 7(a) and U.S. Department of Agriculture (“USDA”) lending platform. Windsor Advantage generates fee income for the Company in connection with its servicing, processing and packaging of such loans for its financial institution clients.

    Fee Income – Gross government loan servicing revenue totaled $4.6 million, including $0.5 million of Capital Bank related servicing fees, during the fourth quarter 2024. Windsor’s total servicing portfolio was $2.5 billion at December 31, 2024.

    COMPARATIVE FINANCIAL HIGHLIGHTS – Unaudited            
                               
      Quarter Ended   4Q24 vs 3Q24   4Q24 vs 4Q23
    (in thousands, except per share data) December 31, 2024   September 30, 2024   December 31, 2023   $ Change   % Change   $ Change   % Change
    Earnings Summary                          
    Interest income $ 61,707     $ 52,610     $ 46,969     $ 9,097     17.3 %   $ 14,738     31.4 %
    Interest expense   17,380       14,256       12,080       3,124     21.9 %     5,300     43.9 %
    Net interest income   44,327       38,354       34,889       5,973     15.6 %     9,438     27.1 %
    Provision for credit losses   7,828       3,748       2,808       4,080     108.9 %     5,020     178.8 %
    Provision for (release of) credit losses on unfunded commitments   122       17       (106 )     105     617.6 %     228     (215.1 )%
    Noninterest income   11,913       6,635       5,936       5,278     79.5 %     5,977     100.7 %
    Noninterest expense   37,514       29,725       26,907       7,789     26.2 %     10,607     39.4 %
    Income before income taxes   10,776       11,499       11,216       (723 )   (6.3 )%     (440 )   (3.9 )%
    Income tax expense   3,243       2,827       2,186       416     14.7 %     1,057     48.4 %
    Net income $ 7,533     $ 8,672     $ 9,030     $ (1,139 )   (13.1 )%   $ (1,497 )   (16.6 )%
                                       
    Pre-tax pre-provision net revenue (“PPNR”) (1) $ 18,726     $ 15,264     $ 13,918     $ 3,462     22.7 %   $ 4,808     34.5 %
    PPNR, as adjusted(1) $ 23,961     $ 15,784     $ 13,918     $ 8,177     51.8 %   $ 10,043     72.2 %
                                       
    Common Share Data                                  
    Earnings per share – Basic $ 0.45     $ 0.62     $ 0.65     $ (0.17 )   (27.4 )%   $ (0.20 )   (30.8 )%
    Earnings per share – Diluted $ 0.45     $ 0.62     $ 0.65     $ (0.17 )   (27.4 )%   $ (0.20 )   (30.8 )%
    Earnings per share – Diluted, as adjusted(1) $ 0.92     $ 0.66     $ 0.65     $ 0.26     39.4 %   $ 0.27     41.5 %
    Weighted average common shares – Basic   16,595       13,914       13,897                  
    Weighted average common shares – Diluted   16,729       13,951       13,989                  
                               
    Return Ratios                          
    Return on average assets (annualized)   0.96 %     1.42 %     1.63 %                
    Return on average assets, as adjusted (annualized)(1)   1.97 %     1.51 %     1.63 %                
    Return on average equity (annualized)   8.50 %     12.59 %     14.44 %                
    Return on average equity, as adjusted (annualized)(1)   17.46 %     13.40 %     14.44 %                
    Return on average tangible common equity (annualized)(1)   9.47 %     12.59 %     14.44 %                
    Core return on average equity, as adjusted (annualized)(1)   17.68 %     13.40 %     14.44 %                
    Core return on average tangible common equity, as adjusted (annualized)(1)   19.19 %     13.40 %     14.44 %                

    ______________
    (1) Refer to Appendix for reconciliation of non-GAAP measures.

    COMPARATIVE FINANCIAL HIGHLIGHTS – Unaudited (Continued)  
                   
      Year Ended        
      December 31,        
    (in thousands, except per share data)   2024       2023     $ Change   % Change
    Earnings Summary              
    Interest income $ 213,301     $ 183,206     $ 30,095     16.4 %
    Interest expense   58,555       41,680       16,875     40.5 %
    Net interest income   154,746       141,526       13,220     9.3 %
    Provision for credit losses   17,720       9,610       8,110     84.4 %
    Provision for (release of) credit losses on unfunded commitments   385       (101 )     486     (481.2 )%
    Noninterest income   31,410       24,975       6,435     25.8 %
    Noninterest expense   126,219       110,767       15,452     14.0 %
    Income before income taxes   41,832       46,225       (4,393 )   (9.5 )%
    Income tax expense   10,860       10,354       506     4.9 %
    Net income $ 30,972     $ 35,871     $ (4,899 )   (13.7 )%
                     
    Pre-tax pre-provision net revenue (“PPNR”) (1) $ 59,937     $ 55,734     $ 4,203     7.5 %
    PPNR, as adjusted(1) $ 66,487     $ 55,734     $ 10,753     19.3 %
                     
    Common Share Data                
    Earnings per share – Basic $ 2.12     $ 2.56     $ (0.44 )   (17.2 )%
    Earnings per share – Diluted $ 2.11     $ 2.55     $ (0.44 )   (17.3 )%
    Earnings per share – Diluted, as adjusted(1) $ 2.73     $ 2.55          
    Weighted average common shares – Basic   14,584       14,003          
    Weighted average common shares – Diluted   14,660       14,081          
                   
    Return Ratios              
    Return on average assets (annualized)   1.21 %     1.64 %        
    Return on average assets, as adjusted (annualized)(1)   1.57 %     1.64 %        
    Return on average equity (annualized)   10.78 %     14.91 %        
    Return on average equity, as adjusted (annualized)(1)   13.94 %     14.91 %        

    ______________
    (1) Refer to Appendix for reconciliation of non-GAAP measures.

    COMPARATIVE FINANCIAL HIGHLIGHTS – Unaudited (Continued)        
                           
      Quarter Ended       Quarter Ended
      December 31,     September 30,   June 30,   March 31,
    (in thousands, except per share data)   2024       2023     % Change     2024       2024       2024  
    Balance Sheet Highlights                      
    Assets $ 3,206,911     $ 2,226,176       44.1 %   $ 2,560,788     $ 2,438,583     $ 2,324,238  
    Investment securities available-for-sale   223,630       208,329       7.3 %     208,700       207,917       202,254  
    Mortgage loans held for sale   21,270       7,481       184.3 %     19,554       19,219       10,303  
    Portfolio loans receivable (2)   2,630,163       1,903,288       38.2 %     2,107,522       2,021,588       1,964,525  
    Allowance for credit losses   48,652       28,610       70.1 %     31,925       30,832       29,350  
    Deposits   2,761,939       1,895,996       45.7 %     2,186,224       2,100,428       2,005,695  
    FHLB borrowings   22,000       22,000       — %     52,000       32,000       22,000  
    Other borrowed funds   12,062       27,062       (55.4 )%     12,062       12,062       12,062  
    Total stockholders’ equity   355,139       254,860       39.3 %     280,111       267,854       259,465  
    Tangible common equity (1)   312,685       254,860       22.7 %     280,111       267,854       259,465  
                           
    Common shares outstanding   16,662       13,923       19.7 %     13,918       13,910       13,890  
    Book value per share $ 21.31     $ 18.31       16.4 %   $ 20.13     $ 19.26     $ 18.68  
    Tangible book value per share (1) $ 18.77     $ 18.31       2.5 %   $ 20.13     $ 19.26     $ 18.68  
    Dividends per share $ 0.10     $ 0.08       25.0 %   $ 0.10     $ 0.08     $ 0.08  

    ______________
    (1) Refer to Appendix for reconciliation of non-GAAP measures.
    (2) Loans are reflected net of deferred fees and costs.

    Consolidated Statements of Income (Unaudited)        
      Three Months Ended Year Ended
    (in thousands) December 31, 2024   September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023   December 31, 2024   December 31, 2023
    Interest income                          
    Loans, including fees $ 58,602     $ 50,047     $ 48,275     $ 45,991     $ 45,109     $ 202,915     $ 174,760  
    Investment securities available-for-sale   1,539       1,343       1,308       1,251       1,083       5,441       4,815  
    Federal funds sold and other   1,566       1,220       1,032       1,127       777       4,945       3,631  
    Total interest income   61,707       52,610       50,615       48,369       46,969       213,301       183,206  
                               
    Interest expense                          
    Deposits   16,385       13,902       13,050       12,833       11,759       56,170       39,625  
    Borrowed funds   995       354       508       528       321       2,385       2,055  
    Total interest expense   17,380       14,256       13,558       13,361       12,080       58,555       41,680  
                               
    Net interest income   44,327       38,354       37,057       35,008       34,889       154,746       141,526  
    Provision for credit losses   7,828       3,748       3,417       2,727       2,808       17,720       9,610  
    Provision for (release of) credit losses on unfunded commitments   122       17       104       142       (106 )     385       (101 )
    Net interest income after provision for credit losses   36,377       34,589       33,536       32,139       32,187       136,641       132,017  
    Noninterest income                          
    Service charges on deposits   241       235       200       207       240       883       964  
    Credit card fees   3,733       4,055       4,330       3,881       3,970       15,999       17,273  
    Mortgage banking revenue   1,821       1,882       1,990       1,453       1,166       7,146       4,896  
    Government lending revenue   2,301       —       —       —       —       2,301       —  
    Government loan servicing revenue   3,993       —       —       —       —       3,993       —  
    Loan servicing rights (government guaranteed)   1,013       —       —       —       —       1,013       —  
    Non-recurring equity and debt investment write-down   (2,620 )     —       —       —       —       (2,620 )     —  
    Other income   1,431       463       370       431       560       2,695       1,842  
    Total noninterest income   11,913       6,635       6,890       5,972       5,936       31,410       24,975  
    Noninterest expenses                          
    Salaries and employee benefits   16,513       13,345       13,272       12,907       11,638       56,037       48,754  
    Occupancy and equipment   2,976       1,791       1,864       1,613       1,573       8,244       5,673  
    Professional fees   2,150       1,980       1,769       1,947       1,930       7,846       9,270  
    Data processing   7,210       6,930       6,788       6,761       6,128       27,689       25,686  
    Advertising   1,032       1,223       2,072       2,032       1,433       6,359       6,161  
    Loan processing   969       615       476       371       198       2,431       1,633  
    Foreclosed real estate expenses, net   —       1       —       1       —       2       7  
    Merger-related expenses   2,615       520       83       712       —       3,930       —  
    Operational losses   993       1,008       782       931       1,490       3,714       4,613  
    Other operating   3,056       2,312       2,387       2,212       2,517       9,967       8,970  
    Total noninterest expenses   37,514       29,725       29,493       29,487       26,907       126,219       110,767  
    Income before income taxes   10,776       11,499       10,933       8,624       11,216       41,832       46,225  
    Income tax expense   3,243       2,827       2,728       2,062       2,186       10,860       10,354  
    Net income $ 7,533     $ 8,672     $ 8,205     $ 6,562     $ 9,030     $ 30,972     $ 35,871  
                                                           
    Consolidated Balance Sheets                  
      (unaudited)   (unaudited)   (unaudited)   (unaudited)   (audited)
    (in thousands, except share data) December 31, 2024   September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023
    Assets                  
    Cash and due from banks $ 25,433     $ 23,462     $ 19,294     $ 12,361     $ 14,513  
    Interest-bearing deposits at other financial institutions   179,841       133,180       117,160       72,787       39,044  
    Federal funds sold   58       58       57       56       407  
    Total cash and cash equivalents   205,332       156,700       136,511       85,204       53,964  
    Investment securities available-for-sale   223,630       208,700       207,917       202,254       208,329  
    Restricted investments   4,479       5,895       4,930       4,441       4,353  
    Loans held for sale   21,270       19,554       19,219       10,303       7,481  
    Portfolio loans receivable, net of deferred fees and costs   2,630,163       2,107,522       2,021,588       1,964,525       1,903,288  
    Less allowance for credit losses   (48,652 )     (31,925 )     (30,832 )     (29,350 )     (28,610 )
    Total portfolio loans held for investment, net   2,581,511       2,075,597       1,990,756       1,935,175       1,874,678  
    Premises and equipment, net   15,525       5,959       5,551       4,500       5,069  
    Accrued interest receivable   16,664       12,468       12,162       12,258       11,494  
    Goodwill   21,126       —       —       —       —  
    Intangible assets   14,072       —       —       —       —  
    Loan servicing assets   5,511       —       —       —       —  
    Deferred tax asset   16,670       10,748       12,150       12,311       12,252  
    Bank owned life insurance   43,956       38,779       38,414       38,062       37,711  
    Other assets   37,165       26,388       10,973       19,730       10,845  
    Total assets $ 3,206,911     $ 2,560,788     $ 2,438,583     $ 2,324,238     $ 2,226,176  
                       
    Liabilities                  
    Deposits                  
    Noninterest-bearing $ 810,928     $ 718,120     $ 684,574     $ 665,812     $ 617,373  
    Interest-bearing   1,951,011       1,468,104       1,415,854       1,339,883       1,278,623  
    Total deposits   2,761,939       2,186,224       2,100,428       2,005,695       1,895,996  
    Federal Home Loan Bank advances   22,000       52,000       32,000       22,000       22,000  
    Other borrowed funds   12,062       12,062       12,062       12,062       27,062  
    Accrued interest payable   9,393       8,503       6,573       6,009       5,583  
    Other liabilities   46,378       21,888       19,666       19,007       20,675  
    Total liabilities   2,851,772       2,280,677       2,170,729       2,064,773       1,971,316  
                       
    Stockholders’ equity                  
    Common stock   167       139       139       139       139  
    Additional paid-in capital   128,598       55,585       55,005       54,229       54,473  
    Retained earnings   237,843       232,995       225,824       218,731       213,345  
    Accumulated other comprehensive loss   (11,469 )     (8,608 )     (13,114 )     (13,634 )     (13,097 )
    Total stockholders’ equity   355,139       280,111       267,854       259,465       254,860  
    Total liabilities and stockholders’ equity $ 3,206,911     $ 2,560,788     $ 2,438,583     $ 2,324,238     $ 2,226,176  
                                           

    The following tables show the average outstanding balance of each principal category of our assets, liabilities and stockholders’ equity, together with the average yields on our assets and the average costs of our liabilities for the periods indicated. Such yields and costs are calculated by dividing the annualized income or expense by the average daily balances of the corresponding assets or liabilities for the same period.

      Three Months Ended
    December 31, 2024    		   Three Months Ended
    September 30, 2024    		   Three Months Ended
    December 31, 2023
      Average
    Outstanding
    Balance    		   Interest Income/
    Expense    		   Average
    Yield/
    Rate(1)    		   Average
    Outstanding
    Balance    		   Interest Income/
    Expense    		   Average
    Yield/
    Rate(1)    		   Average
    Outstanding
    Balance    		   Interest Income/
    Expense    		   Average
    Yield/
    Rate(1)
      (in thousands)
    Assets                                  
    Interest earning assets:                                  
    Interest-bearing deposits $ 140,206     $ 1,446       4.10 %   $ 91,089     $ 1,137       4.97 %   $ 65,336     $ 680       4.13 %
    Federal funds sold   58       —       —       57       1       6.98       1,574       21       5.29  
    Investment securities available-for-sale   236,951       1,539       2.58       221,303       1,343       2.41       223,132       1,083       1.93  
    Restricted investments   7,292       120       6.55       4,911       82       6.64       4,518       76       6.67  
    Loans held for sale   25,614       193       3.00       9,967       161       6.43       4,601       83       7.16  
    Portfolio loans receivable(2)(3)   2,592,960       58,409       8.96       2,053,619       49,886       9.66       1,863,298       45,026       9.59  
    Total interest earning assets   3,003,081       61,707       8.17       2,380,946       52,610       8.79       2,162,459       46,969       8.62  
    Noninterest earning assets   117,026               56,924               40,020          
    Total assets $ 3,120,107             $ 2,437,870             $ 2,202,479          
                                       
    Liabilities and Stockholders’ Equity                                  
    Interest-bearing liabilities:                                  
    Interest-bearing demand accounts $ 257,446       424       0.66     $ 228,365       321       0.56     $ 195,539       90       0.18  
    Savings   13,497       20       0.59       4,135       5       0.48       5,184       2       0.15  
    Money market accounts   763,526       7,131       3.72       698,239       7,442       4.24       680,697       7,139       4.16  
    Time deposits   847,618       8,810       4.13       479,824       6,134       5.09       380,731       4,528       4.72  
    Borrowed funds   97,116       995       4.08       43,655       354       3.23       41,823       321       3.05  
    Total interest-bearing liabilities   1,979,203       17,380       3.49       1,454,218       14,256       3.90       1,303,974       12,080       3.68  
    Noninterest-bearing liabilities:                                  
    Noninterest-bearing liabilities   58,460               28,834               27,529          
    Noninterest-bearing deposits   729,907               680,731               622,941          
    Stockholders’ equity   352,537               274,087               248,035          
    Total liabilities and stockholders’ equity $ 3,120,107             $ 2,437,870             $ 2,202,479          
                                       
    Net interest spread           4.68 %             4.89 %             4.94 %
    Net interest income     $ 44,327             $ 38,354             $ 34,889      
    Net interest margin(4)           5.87 %             6.41 %             6.40 %

    _______________
    (1)   Annualized.
    (2)   Includes nonaccrual loans.
    (3)   For the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, collectively, portfolio loans yield excluding credit card loans was 6.98%, 7.15% and 6.89%, respectively.
    (4)   For the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, collectively, credit card loans accounted for 182, 233 and 248 basis points of the reported net interest margin, respectively.

      Year Ended December 31,
        2024       2023  
      Average
    Outstanding
    Balance    		   Interest Income/
    Expense    		   Average
    Yield/
    Rate(1)    		   Average
    Outstanding
    Balance    		   Interest Income/
    Expense    		   Average
    Yield/
    Rate(1)
      (in thousands)
    Assets                      
    Interest earning assets:                      
    Interest-bearing deposits $ 98,319     $ 4,569       4.65 %   $ 70,407     $ 3,211       4.56 %
    Federal funds sold   57       3       5.26       1,597       74       4.63  
    Investment securities available-for-sale   228,909       5,441       2.38       245,466       4,815       1.96  
    Restricted investments   5,563       373       6.71       5,016       346       6.90  
    Loans held for sale   12,121       569       4.69       5,755       382       6.64  
    Portfolio loans receivable(2)(3)   2,142,638       202,346       9.44       1,816,968       174,378       9.60  
    Total interest earning assets   2,487,607       213,301       8.57       2,145,209       183,206       8.54  
    Noninterest earning assets   66,442               43,090          
    Total assets $ 2,554,049             $ 2,188,299          
                           
    Liabilities and Stockholders’ Equity                      
    Interest-bearing liabilities:                      
    Interest-bearing demand accounts $ 221,437     $ 1,003       0.45 %   $ 201,194     $ 298       0.15 %
    Savings   6,732       27       0.40       5,768       8       0.14  
    Money market accounts   704,002       28,741       4.08       642,013       23,510       3.66  
    Time deposits   561,369       26,399       4.70       360,464       15,809       4.39  
    Borrowed funds   63,686       2,385       3.74       59,302       2,055       3.47  
    Total interest-bearing liabilities   1,557,226       58,555       3.76       1,268,741       41,680       3.29  
    Noninterest-bearing liabilities:                      
    Noninterest-bearing liabilities   34,043               24,026          
    Noninterest-bearing deposits   675,360               655,013          
    Stockholders’ equity   287,420               240,519          
    Total liabilities and stockholders’ equity $ 2,554,049             $ 2,188,299          
                           
    Net interest spread           4.81 %             5.25 %
    Net interest income     $ 154,746             $ 141,526      
    Net interest margin(4)           6.22 %             6.60 %

    (1)   Annualized.
    (2)   Includes nonaccrual loans.
    (3)   For the years ended December 31, 2024 and 2023, collectively, portfolio loans yield excluding credit card loans was 7.03% and 6.65%, respectively.
    (4)   For the years ended December 31, 2024 and 2023, collectively, credit card loans accounted for 222 and 264 basis points of the reported net interest margin, respectively.

    The Company’s reportable segments represent business units with discrete financial information whose results are regularly reviewed by management. The five segments include Commercial Banking, Capital Bank Home Loans (the Company’s mortgage loan division), OpenSky™ (the Company’s credit card division), Windsor Advantage and the Corporate Office.

    Effective January 1, 2024, the Company allocated certain expenses previously recorded directly to the Commercial Bank segment to the other segments. These expenses are for shared services also consumed by OpenSky™, CBHL, and Corporate. The Company performs an allocation process based on several metrics the Company believes more accurately ascribe shared service overhead to each segment. The Company believes this reflects the cost of support for each segment that should be considered in assessing segment performance. Historical information has been recast to reflect financial information consistently with the 2024 presentation.

    The following schedule presents financial information for the periods indicated. Total assets are presented as of December 31, 2024, September 30, 2024, and December 31, 2023.

    Segments                            
    For the three months ended December 31, 2024                
    (in thousands)   Commercial Bank   CBHL   OpenSky™   Windsor Advantage   Corporate(2)   Eliminations   Consolidated
    Interest income   $ 45,195     $ 192     $ 15,454     $ —     $ 874     $ (8 )   $ 61,707  
    Interest expense     17,086       131       —       —       171       (8 )     17,380  
    Net interest income     28,109       61       15,454       —       703       —       44,327  
    Provision for credit losses     6,651       —       1,177       —       —       —       7,828  
    Provision for credit losses on unfunded commitments     122       —       —       —       —       —       122  
    Net interest income after provision     21,336       61       14,277       —       703       —       36,377  
    Noninterest income (loss)     4,547       1,676       3,743       4,566       (2,619 )     —       11,913  
    Noninterest expense(1)     16,539       2,377       12,595       2,670       3,333       —       37,514  
    Net income (loss) before taxes   $ 9,344     $ (640 )   $ 5,425     $ 1,896     $ (5,249 )   $ —     $ 10,776  
                                 
    Total assets   $ 2,994,356     $ 21,691     $ 125,913     $ 7,922     $ 376,930     $ (319,901 )   $ 3,206,911  
                                 
    For the three months ended September 30, 2024                
    (in thousands)   Commercial Bank   CBHL   OpenSky™   Windsor Advantage   Corporate(2)   Eliminations   Consolidated
    Interest income   $ 35,805     $ 161     $ 15,625     $ —     $ 1,049     $ (30 )   $ 52,610  
    Interest expense     13,984       108       —       —       194       (30 )     14,256  
    Net interest income     21,821       53       15,625       —       855       —       38,354  
    Provision for credit losses     1,453       —       2,294       —       1       —       3,748  
    Provision for credit losses on unfunded commitments     17       —       —       —       —       —       17  
    Net interest income after provision     20,351       53       13,331       —       854       —       34,589  
    Noninterest income     726       1,811       4,096       —       2       —       6,635  
    Noninterest expense(1)     12,422       2,395       13,276       —       1,632       —       29,725  
    Net income (loss) before taxes   $ 8,655     $ (531 )   $ 4,151     $ —     $ (776 )   $ —     $ 11,499  
                                 
    Total assets   $ 2,358,555     $ 19,831     $ 121,587     $ —     $ 300,325     $ (239,510 )   $ 2,560,788  
                                 
    For the three months ended December 31, 2023                
    (in thousands)   Commercial Bank   CBHL   OpenSky™   Windsor Advantage   Corporate(2)   Eliminations   Consolidated
    Interest income   $ 30,957     $ 83     $ 15,035     $ —     $ 964     $ (70 )   $ 46,969  
    Interest expense     11,884       31       —       —       235       (70 )     12,080  
    Net interest income     19,073       52       15,035       —       729       —       34,889  
    Provision for (release of) credit losses     691       —       2,125       —       (8 )     —       2,808  
    Release of credit losses on unfunded commitments     (106 )     —       —       —       —       —       (106 )
    Net interest income after provision     18,488       52       12,910       —       737       —       32,187  
    Noninterest income     773       1,166       3,996       —       1       —       5,936  
    Noninterest expense(1)     12,303       1,617       12,669       —       318       —       26,907  
    Net income (loss) before taxes   $ 6,958     $ (399 )   $ 4,237     $ —     $ 420     $ —     $ 11,216  
                                 
    Total assets   $ 2,051,945     $ 8,589     $ 117,477     $ —     $ 277,565     $ (229,400 )   $ 2,226,176  

    ________________________
    (1) Noninterest expense includes $6.3 million, $6.2 million, and $5.7 million in data processing expense in OpenSky’s™ segment for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023, respectively.
    (2) The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company.

    Segments                            
    For the year ended December 31, 2024                
    (in thousands)   Commercial Bank   CBHL   OpenSky™   Windsor Advantage   Corporate(2)   Eliminations   Consolidated
    Interest income   $ 147,464     $ 568     $ 61,785     $ —     $ 3,646     $ (162 )   $ 213,301  
    Interest expense     57,536       363       —       —       818       (162 )     58,555  
    Net interest income     89,928       205       61,785       —       2,828       —       154,746  
    Provision for credit losses     10,331       —       7,329       —       60       —       17,720  
    Provision for credit losses on unfunded commitments     385       —       —       —       —       —       385  
    Net interest income after provision     79,212       205       54,456       —       2,768       —       136,641  
    Noninterest income (loss)     6,654       6,684       16,122       4,566       (2,616 )     —       31,410  
    Noninterest expense(1)     53,429       9,377       53,245       2,670       7,498       —       126,219  
    Net income (loss) before taxes   $ 32,437     $ (2,488 )   $ 17,333     $ 1,896     $ (7,346 )   $ —     $ 41,832  
                                 
    Total assets   $ 2,994,356     $ 21,691     $ 125,913     $ 7,922     $ 376,930     $ (319,901 )   $ 3,206,911  
                                 
    For the year ended December 31, 2023                
    (in thousands)   Commercial Bank   CBHL   OpenSky™   Windsor Advantage   Corporate(2)   Eliminations   Consolidated
    Interest income   $ 116,408     $ 382     $ 62,476     $ —     $ 4,238     $ (298 )   $ 183,206  
    Interest expense     40,896       135       —       —       947       (298 )     41,680  
    Net interest income     75,512       247       62,476       —       3,291       —       141,526  
    Provision for credit losses     1,540       —       7,948       —       122       —       9,610  
    Release of credit losses on unfunded commitments     (101 )     —       —       —       —       —       (101 )
    Net interest income after provision     74,073       247       54,528       —       3,169       —       132,017  
    Noninterest income     2,737       4,909       17,325       —       4       —       24,975  
    Noninterest expense(1)     48,347       8,155       52,752       —       1,513       —       110,767  
    Net income (loss) before taxes   $ 28,463     $ (2,999 )   $ 19,101     $ —     $ 1,660     $ —     $ 46,225  
                                 
    Total assets   $ 2,051,945     $ 8,589     $ 117,477     $ —     $ 277,565     $ (229,400 )   $ 2,226,176  

    (1) Noninterest expense includes $24.9 million and $23.7 million in data processing expense in OpenSky’s™ segment for the years ended December 31, 2024 and 2023, respectively.
    (2) The Corporate segment invests idle cash in revenue-producing assets including interest-bearing cash accounts, loan participations and other appropriate investments for the Company.

    HISTORICAL FINANCIAL HIGHLIGHTS – Unaudited
        Quarter Ended
    (in thousands, except per share data)   December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Earnings:                    
    Net income   $ 7,533     $ 8,672     $ 8,205     $ 6,562     $ 9,030  
    Earnings per common share, diluted     0.45       0.62       0.59       0.47       0.65  
    Net interest margin     5.87 %     6.41 %     6.46 %     6.24 %     6.40 %
    Net interest margin, excluding credit card loans (1)     4.05 %     4.08 %     4.00 %     3.85 %     3.92 %
    Return on average assets(2)     0.96 %     1.42 %     1.40 %     1.15 %     1.63 %
    Return on average equity(2)     8.50 %     12.59 %     12.53 %     10.19 %     14.44 %
    Efficiency ratio     66.70 %     66.07 %     67.11 %     71.95 %     65.91 %
                         
    Balance Sheet:                    
    Total portfolio loans receivable, net deferred fees   $ 2,630,163     $ 2,107,522     $ 2,021,588     $ 1,964,525     $ 1,902,643  
    Total deposits     2,761,939       2,186,224       2,100,428       2,005,695       1,895,996  
    Total assets     3,206,911       2,560,788       2,438,583       2,324,238       2,226,176  
    Total stockholders’ equity     355,139       280,111       267,854       259,465       254,860  
    Total average portfolio loans receivable, net deferred fees     2,592,960       2,053,619       1,992,630       1,927,372       1,863,298  
    Total average deposits     2,611,994       2,091,294       2,010,736       1,957,559       1,885,092  
    Portfolio loans-to-deposit ratio (period-end balances)     95.23 %     96.40 %     96.25 %     97.95 %     100.35 %
    Portfolio loans-to-deposit ratio (average balances)     99.27 %     98.20 %     99.10 %     98.46 %     98.84 %
                         
    Asset Quality Ratios:                    
    Nonperforming assets to total assets     0.94 %     0.60 %     0.58 %     0.62 %     0.72 %
    Nonperforming loans to total loans     1.15 %     0.73 %     0.70 %     0.73 %     0.84 %
    Net charge-offs to average portfolio loans (2)     0.37 %     0.51 %     0.39 %     0.41 %     0.53 %
    Allowance for credit losses to total loans     1.85 %     1.51 %     1.53 %     1.49 %     1.50 %
    Allowance for credit losses to non-performing loans     160.88 %     206.50 %     219.40 %     204.37 %     178.34 %
                         
    Bank Capital Ratios:                    
    Total risk based capital ratio     12.82 %     13.76 %     14.51 %     14.36 %     14.81 %
    Tier 1 risk based capital ratio     11.56 %     12.50 %     13.25 %     13.10 %     13.56 %
    Leverage ratio     9.12 %     9.84 %     10.36 %     10.29 %     10.51 %
    Common equity Tier 1 capital ratio     11.56 %     12.50 %     13.25 %     13.10 %     13.56 %
    Tangible common equity     9.31 %     9.12 %     9.53 %     9.66 %     9.91 %
    Holding Company Capital Ratios:                    
    Total risk based capital ratio     15.48 %     16.65 %     16.98 %     16.83 %     17.38 %
    Tier 1 risk based capital ratio     13.83 %     14.88 %     15.19 %     15.03 %     15.55 %
    Leverage ratio     11.07 %     11.85 %     11.93 %     11.87 %     12.14 %
    Common equity Tier 1 capital ratio     13.74 %     14.78 %     15.08 %     14.92 %     15.43 %
    Tangible common equity     11.07 %     10.94 %     10.98 %     11.16 %     11.45 %

    _______________
    (1) Refer to Appendix for reconciliation of non-GAAP measures.
    (2) Annualized.

    HISTORICAL FINANCIAL HIGHLIGHTS – Unaudited (Continued)
        Quarter Ended
    (in thousands, except per share data)   December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
    Composition of Loans:                    
    Commercial real estate, non owner-occupied   $ 471,329     $ 403,487     $ 397,080     $ 377,224     $ 351,116  
    Commercial real estate, owner-occupied     440,026       351,462       319,370       330,840       307,911  
    Residential real estate     688,552       623,684       601,312       577,112       573,104  
    Construction real estate     321,252       301,909       294,489       290,016       290,108  
    Commercial and industrial     554,550       271,811       255,686       254,577       239,208  
    Lender finance     28,574       29,546       33,294       13,484       11,085  
    Business equity lines of credit     3,090       2,663       2,989       14,768       14,117  
    Credit card, net of reserve(3)     127,766       127,098       122,217       111,898       123,331  
    Other consumer loans     2,089       2,045       1,930       738       950  
    Portfolio loans receivable   $ 2,637,228     $ 2,113,705     $ 2,028,367     $ 1,970,657     $ 1,910,930  
    Deferred origination fees, net     (7,065 )     (6,183 )     (6,779 )     (6,132 )     (7,642 )
    Portfolio loans receivable, net   $ 2,630,163     $ 2,107,522     $ 2,021,588     $ 1,964,525     $ 1,903,288  
                         
    Composition of Deposits:                    
    Noninterest-bearing   $ 810,928     $ 718,120     $ 684,574     $ 665,812     $ 617,373  
    Interest-bearing demand     238,881       266,493       266,070       193,963       199,308  
    Savings     13,488       3,763       4,270       4,525       5,211  
    Money markets     816,708       686,526       672,455       678,435       663,129  
    Customer time deposits     548,901       358,300       317,911       302,319       268,619  
    Brokered time deposits     333,033       153,022       155,148       160,641       142,356  
    Total deposits   $ 2,761,939     $ 2,186,224     $ 2,100,428     $ 2,005,695     $ 1,895,996  
                         
    Capital Bank Home Loan Metrics:                    
    Origination of loans held for sale   $ 89,998     $ 74,690     $ 82,363     $ 52,080     $ 45,152  
    Mortgage loans sold     77,399       67,296       66,417       40,377       34,140  
    Gain on sale of loans     1,897       1,644       1,732       1,238       1,015  
    Purchase volume as a % of originations     90.42 %     90.98 %     96.48 %     97.83 %     89.99 %
    Gain on sale as a % of loans sold(4)     2.45 %     2.44 %     2.61 %     3.07 %     2.97 %
    Mortgage commissions   $ 620     $ 598     $ 582     $ 490     $ 465  
                         
    OpenSky™Portfolio Metrics:                    
    Open customer accounts     552,566       548,952       537,734       526,950       525,314  
    Secured credit card loans, gross   $ 87,226     $ 89,641     $ 90,961     $ 85,663     $ 95,300  
    Unsecured credit card loans, gross     42,430       39,730       33,560       28,508       30,817  
    Noninterest secured credit card deposits     166,355       170,750       173,499       171,771       173,857  

    _______________
    (3) Credit card loans are presented net of reserve for interest and fees.
    (4) Gain on sale percentage is calculated as gain on sale of loans divided by mortgage loans sold.  

    Appendix

    Reconciliation of Non-GAAP Measures
     

    The Company has presented the following non-GAAP (U.S. Generally Accepted Accounting Principles) financial measures because it believes that these measures provide useful and comparative information to assess trends in the Company’s results of operations and financial condition. Presentation of these non-GAAP financial measures is consistent with how the Company evaluates its performance internally and these non-GAAP financial measures are frequently used by securities analysts, investors and other interested parties in the evaluation of companies in the Company’s industry. Investors should recognize that the Company’s presentation of these non-GAAP financial measures might not be comparable to similarly-titled measures of other companies. These non-GAAP financial measures should not be considered a substitute for GAAP basis measures and the Company strongly encourages a review of its condensed consolidated financial statements in their entirety.

    Earnings Metrics, as Adjusted Quarter Ended
    (in thousands, except per share data) December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
                       
    Net Income $ 7,533     $ 8,672     $ 8,205     $ 6,562     $ 9,030  
    Add: Merger-Related Expenses, net of tax   2,151       557       62       538       —  
    Add: Non-recurring equity and debt investment write-down   2,620       —       —       —       —  
    Add: IFH ACL Provision, net of tax   3,169       —       —       —       —  
    Net Income, as Adjusted $ 15,473     $ 9,229     $ 8,267     $ 7,100     $ 9,030  
                       
    Weighted Average Common Shares – Diluted   16,729       13,951       13,895       13,919       13,989  
    Earnings per Share – Diluted $ 0.45     $ 0.62     $ 0.59     $ 0.47     $ 0.65  
    Earnings per Share – Diluted, as Adjusted $ 0.92     $ 0.66     $ 0.59     $ 0.51     $ 0.65  
                       
    Average Assets $ 3,120,107     $ 2,437,870     $ 2,353,868     $ 2,299,234     $ 2,202,479  
    Return on Average Assets(1)   0.96 %     1.42 %     1.40 %     1.15 %     1.63 %
    Return on Average Assets, as Adjusted(1)   1.97 %     1.51 %     1.41 %     1.24 %     1.63 %
                       
    Average Equity $ 352,537     $ 274,087     $ 263,425     $ 258,892     $ 248,035  
    Return on Average Equity(1)   8.50 %     12.59 %     12.53 %     10.19 %     14.44 %
    Return on Average Equity, as Adjusted(1)   17.46 %     13.40 %     12.62 %     11.03 %     14.44 %
                       
    Net Interest Income (a) $ 44,327     $ 38,354     $ 37,057     $ 35,008     $ 34,889  
    Noninterest Income   11,913       6,635       6,890       5,972       5,936  
    Total Revenue $ 56,240     $ 44,989     $ 43,947     $ 40,980     $ 40,825  
    Noninterest Expense $ 37,514     $ 29,725     $ 29,493     $ 29,487     $ 26,907  
    Efficiency Ratio(2)   66.70 %     66.07 %     67.11 %     71.95 %     65.91 %
                       
    Noninterest Income $ 11,913     $ 6,635     $ 6,890     $ 5,972     $ 5,936  
    Add: Non-recurring equity and debt investment write-down   2,620       —       —       —       —  
    Noninterest Income, as Adjusted (b) $ 14,533     $ 6,635     $ 6,890     $ 5,972     $ 5,936  
    Total Revenue, as Adjusted (a) + (b) $ 58,860     $ 44,989     $ 43,947     $ 40,980     $ 40,825  
                       
    Noninterest Expense $ 37,514     $ 29,725     $ 29,493     $ 29,487     $ 26,907  
    Less: Merger-Related Expenses   2,615       520       83       712       —  
    Noninterest Expense, as Adjusted $ 34,899     $ 29,205     $ 29,410     $ 28,775     $ 26,907  
    Efficiency Ratio, as Adjusted(2)   59.29 %     64.92 %     66.92 %     70.22 %     65.91 %

    _______________
    (1) Annualized.
    (2) The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).

    Earnings Metrics, as Adjusted Year Ended
    (in thousands, except per share data) December 31, 2024   December 31, 2023
           
    Net Income $ 30,972     $ 35,871  
    Add: Merger-Related Expenses, net of tax   3,308       —  
    Add: Non-recurring equity and debt investment write-down   2,620       —  
    Add: IFH ACL Provision, net of tax   3,169       —  
    Net Income, as Adjusted $ 40,069     $ 35,871  
           
    Weighted average common shares – Diluted   14,660       14,081  
    Earnings per share – Diluted $ 2.11     $ 2.55  
    Earnings per share – Diluted, as Adjusted $ 2.73     $ 2.55  
           
    Average Assets $ 2,554,049     $ 2,188,299  
    Return on Average Assets(1)   1.21 %     1.64 %
    Return on Average Assets, as Adjusted(1)   1.57 %     1.64 %
           
    Average Equity $ 287,420     $ 240,519  
    Return on Average Equity(1)   10.78 %     14.91 %
    Return on Average Equity, as Adjusted(1)   13.94 %     14.91 %
           
    Net Interest Income (a) $ 154,746     $ 141,526  
    Noninterest Income   31,410       24,975  
    Total Revenue $ 186,156     $ 166,501  
    Noninterest Expense $ 126,219     $ 110,767  
    Efficiency Ratio(2)   67.80 %     66.53 %
           
    Noninterest Income $ 31,410     $ 24,975  
    Add: Non-recurring equity and debt investment write-down   2,620       —  
    Noninterest Income, as Adjusted (b) $ 34,030     $ 24,975  
    Total Revenue, as Adjusted (a) + (b) $ 188,776     $ 166,501  
           
    Noninterest Expense $ 126,219     $ 110,767  
    Less: Merger-Related Expenses   3,930       —  
    Noninterest Expense, as Adjusted $ 122,289     $ 110,767  
    Efficiency Ratio, as Adjusted(2)   64.78 %     66.53 %

    _______________
    (1) Annualized.
    (2) The efficiency ratio is calculated by dividing noninterest expense by total revenue (net interest income plus noninterest income).

    Net Interest Margin, as Adjusted Quarter Ended
    (in thousands) December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
                       
    Net Interest Income $ 44,327     $ 38,354     $ 37,057     $ 35,008     $ 34,889  
    Less: Credit Card Loan Income   15,022       15,137       15,205       14,457       14,677  
    Net Interest Income, as Adjusted $ 29,305     $ 23,217     $ 21,852     $ 20,551     $ 20,212  
    Average Interest Earning Assets   3,003,081       2,380,946       2,307,070       2,254,663       2,162,459  
    Less: Average Credit Card Loans   120,993       119,458       111,288       110,483       114,551  
    Total Average Interest Earning Assets, as Adjusted $ 2,882,088     $ 2,261,488     $ 2,195,782     $ 2,144,180     $ 2,047,908  
    Net Interest Margin, as Adjusted   4.05 %     4.08 %     4.00 %     3.85 %     3.92 %
           
    Net Interest Margin, as Adjusted Year Ended
    (in thousands) December 31,
    2024    		   December 31,
    2023
           
    Net Interest Income $ 154,746     $ 141,526  
    Less: Credit Card Loan Income   59,821       61,096  
    Net Interest Income, as Adjusted $ 94,925     $ 80,430  
    Average Interest Earning Assets   2,487,607       2,145,209  
    Less: Average Credit Card Loans   115,581       114,450  
    Total Average Interest Earning Assets, as Adjusted $ 2,372,026     $ 2,030,759  
    Net Interest Margin, as Adjusted   4.00 %     3.96 %
                   
    Portfolio Loans Receivable Yield, as Adjusted Quarter Ended
    (in thousands) December 31,
    2024    		   September 30,
    2024    		   June 30,
    2024    		   March 31,
    2024    		   December 31,
    2023
                       
    Portfolio Loans Receivable Interest Income $ 58,409     $ 49,886     $ 48,143     $ 45,908     $ 45,026  
    Less: Credit Card Loan Income   15,022       15,137       15,205       14,457       14,677  
    Portfolio Loans Receivable Interest Income, as Adjusted $ 43,387     $ 34,749     $ 32,938     $ 31,451     $ 30,349  
    Average Portfolio Loans Receivable   2,592,960       2,053,619       1,992,630       1,927,372       1,863,298  
    Less: Average Credit Card Loans   120,993       119,458       111,288       110,483       114,551  
    Total Average Portfolio Loans Receivable, as Adjusted $ 2,471,967     $ 1,934,161     $ 1,881,342     $ 1,816,889     $ 1,748,747  
    Portfolio Loans Receivable Yield, as Adjusted   6.98 %     7.15 %     7.04 %     6.96 %     6.89 %
           
    Portfolio Loans Receivable Yield, as Adjusted Year Ended
    (in thousands) December 31, 2024   December 31, 2023
           
    Portfolio Loans Receivable Interest Income $ 202,346     $ 174,378  
    Less: Credit Card Loan Income   59,821       61,096  
    Portfolio Loans Receivable Interest Income, as Adjusted $ 142,525     $ 113,282  
    Average Portfolio Loans Receivable   2,142,638       1,816,968  
    Less: Average Credit Card Loans   115,581       114,450  
    Total Average Portfolio Loans Receivable, as Adjusted $ 2,027,057     $ 1,702,518  
    Portfolio Loans Receivable Yield, as Adjusted   7.03 %     6.65 %
                   
    Pre-tax, Pre-Provision Net Revenue (“PPNR”) Quarter Ended
    (in thousands) December 31, 2024   September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023
                       
    Net Income $ 7,533     $ 8,672     $ 8,205     $ 6,562     $ 9,030  
    Add: Income Tax Expense   3,243       2,827       2,728       2,062       2,186  
    Add: Provision for Credit Losses   7,828       3,748       3,417       2,727       2,808  
    Add: Provision for (Release of) Credit Losses on Unfunded Commitments   122       17       104       142       (106 )
    Pre-tax, Pre-Provision Net Revenue (“PPNR”) $ 18,726     $ 15,264     $ 14,454     $ 11,493     $ 13,918  
                                           
           
    Pre-tax, Pre-Provision Net Revenue (“PPNR”) Year Ended
    (in thousands) December 31, 2024   December 31, 2023
           
    Net Income $ 30,972     $ 35,871  
    Add: Income Tax Expense   10,860       10,354  
    Add: Provision for Credit Losses   17,720       9,610  
    Add: Provision for (Release of) Credit Losses on Unfunded Commitments   385       (101 )
    Pre-tax, Pre-Provision Net Revenue (“PPNR”) $ 59,937     $ 55,734  
                   
    PPNR, as Adjusted Quarter Ended
    (in thousands) December 31, 2024   September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023
                       
    Net Income $ 7,533     $ 8,672     $ 8,205     $ 6,562     $ 9,030  
    Add: Income Tax Expense   3,243       2,827       2,728       2,062       2,186  
    Add: Provision for Credit Losses   7,828       3,748       3,417       2,727       2,808  
    Add: Provision for (Release of) Credit Losses on Unfunded Commitments   122       17       104       142       (106 )
    Add: Merger-Related Expenses   2,615       520       83       712       —  
    Add: Non-recurring equity and debt investment write-down   2,620       —       —       —       —  
    PPNR, as Adjusted $ 23,961     $ 15,784     $ 14,537     $ 12,205     $ 13,918  
                                           
           
    PPNR, as Adjusted Year Ended
    (in thousands) December 31, 2024   December 31, 2023
           
    Net Income $ 30,972     $ 35,871  
    Add: Income Tax Expense   10,860       10,354  
    Add: Provision for Credit Losses   17,720       9,610  
    Add: Provision for (Release of) Credit Losses on Unfunded Commitments   385       (101 )
    Add: Merger-Related Expenses   3,930       —  
    Add: Non-recurring equity and debt investment write-down   2,620       —  
    PPNR, as Adjusted $ 66,487     $ 55,734  
                   
    Allowance for Credit Losses to Total Portfolio Loans Quarter Ended
    (in thousands) December 31, 2024   September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023
                       
    Allowance for Credit Losses $ 48,652     $ 31,925     $ 30,832     $ 29,350     $ 28,610  
    Total Portfolio Loans   2,630,163       2,107,522       2,021,588       1,964,525       1,903,288  
    Allowance for Credit Losses to Total Portfolio Loans   1.85 %     1.51 %     1.53 %     1.49 %     1.50 %
                                           
    Nonperforming Assets to Total Assets Quarter Ended
    (in thousands) December 31, 2024   September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023
                       
    Total Nonperforming Assets $ 30,241     $ 15,460     $ 14,053     $ 14,361     $ 16,042  
    Total Assets   3,206,911       2,560,788       2,438,583       2,324,238       2,226,176  
    Nonperforming Assets to Total Assets   0.94 %     0.60 %     0.58 %     0.62 %     0.72 %
                                           
    Nonperforming Loans to Total Portfolio Loans Quarter Ended
    (in thousands) December 31, 2024   September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023
                       
    Total Nonperforming Loans $ 30,241     $ 15,460     $ 14,053     $ 14,361     $ 16,042  
    Total Portfolio Loans   2,630,163       2,107,522       2,021,588       1,964,525       1,903,288  
    Nonperforming Loans to Total Portfolio Loans   1.15 %     0.73 %     0.70 %     0.73 %     0.84 %
                                           
    Net Charge-Offs to Average Portfolio Loans Quarter Ended
    (in thousands) December 31, 2024   September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023
                       
    Total Net Charge-Offs $ 2,427     $ 2,655     $ 1,935     $ 1,987     $ 2,477  
    Total Average Portfolio Loans   2,592,960       2,053,619       1,992,630       1,927,372       1,863,298  
    Net Charge-Offs to Average Portfolio Loans, Annualized   0.37 %     0.51 %     0.39 %     0.41 %     0.53 %
                                           
    Net Charge-offs to Average Portfolio Loans Year Ended
    (in thousands) December 31, 2024   December 31, 2023
           
    Total Net Charge-Offs $ 9,004     $ 8,473  
    Total Average Portfolio Loans   2,142,638       1,816,968  
    Net Charge-Offs to Average Portfolio Loans, Annualized   0.42 %     0.47 %
                   
    Tangible Book Value per Share Quarter Ended
    (in thousands, except share and per share data) December 31, 2024   September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023
                       
    Total Stockholders’ Equity $ 355,139     $ 280,111     $ 267,854     $ 259,465     $ 254,860  
    Less: Preferred Equity   —       —       —       —       —  
    Less: Intangible Assets   42,454       —       —       —       —  
    Tangible Common Equity $ 312,685     $ 280,111     $ 267,854     $ 259,465     $ 254,860  
    Period End Shares Outstanding   16,662,405       13,917,891       13,910,467       13,889,563       13,922,532  
    Tangible Book Value per Share $ 18.77     $ 20.13     $ 19.26     $ 18.68     $ 18.31  
                                           
    Return on Average Tangible Common Equity Quarter Ended
    (in thousands) December 31, 2024   September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023
                       
    Net Income $ 7,533     $ 8,672     $ 8,205     $ 6,562     $ 9,030  
    Add: Intangible Amortization, Net of Tax   198       —       —       —       —  
    Net Tangible Income $ 7,731     $ 8,672     $ 8,205     $ 6,562     $ 9,030  
    Average Equity   352,537       274,087       263,425       258,892       248,035  
    Less: Average Intangible Assets   27,653       —       —       —       —  
    Net Average Tangible Common Equity $ 324,884     $ 274,087     $ 263,425     $ 258,892     $ 248,035  
    Return on Average Equity   8.50 %     12.59 %     12.53 %     10.19 %     14.44 %
    Return on Average Tangible Common Equity   9.47 %     12.59 %     12.53 %     10.19 %     14.44 %
                                           
    Core Return on Average Tangible Common Equity Quarter Ended
    (in thousands) December 31, 2024   September 30, 2024   June 30, 2024   March 31, 2024   December 31, 2023
                       
    Net Income, as Adjusted $ 15,473     $ 9,229     $ 8,267     $ 7,100     $ 9,030  
    Add: Intangible Amortization, Net of Tax   198       —       —       —       —  
    Net Tangible Income, as Adjusted $ 15,671     $ 9,229     $ 8,267     $ 7,100     $ 9,030  
    Core Return on Average Equity, as Adjusted   17.68 %     13.40 %     12.62 %     11.03 %     14.44 %
    Core Return on Average Tangible Common Equity, as Adjusted   19.19 %     13.40 %     12.62 %     11.03 %     14.44 %
                                           

    ABOUT CAPITAL BANCORP, INC.

    Capital Bancorp, Inc., Rockville, Maryland is a registered bank holding company incorporated under the laws of Maryland. Capital Bancorp has been providing financial services since 1999 and now operates bank branches in six locations in the greater Washington, D.C. and Baltimore, Maryland markets, one bank branch in Fort Lauderdale, Florida and one bank branch in Chicago, Illinois. Capital Bancorp had assets of approximately $3.2 billion at December 31, 2024 and its common stock is traded in the NASDAQ Global Market under the symbol “CBNK.” More information can be found at the Company’s website www.CapitalBankMD.com under its investor relations page.

    FORWARD-LOOKING STATEMENTS

    This earnings release contains forward-looking statements. These forward-looking statements reflect our current views with respect to, among other things, future events and our financial performance. Any statements about our management’s expectations, beliefs, plans, predictions, forecasts, objectives, assumptions or future events or performance are not historical facts and may be forward-looking. These statements are often, but not always, made through the use of words or phrases such as “anticipate,” “believes,” “can,” “could,” “may,” “predicts,” “potential,” “should,” “will,” “estimate,” “plans,” “projects,” “continuing,” “ongoing,” “expects,” “optimistic,” “intends” and similar words or phrases. Any or all of the forward-looking statements in this earnings release may turn out to be inaccurate. The inclusion of forward-looking information in this earnings release should not be regarded as a representation by us or any other person that the future plans, estimates or expectations contemplated by us will be achieved. We have based these forward-looking statements largely on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy and financial needs. Our actual results could differ materially from those anticipated in such forward-looking statements.  Accordingly, we caution you that any such forward-looking statements are not a guarantee of future performance and that actual results may prove to be materially different from the results expressed or implied by the forward-looking statements due to a number of factors. For details on some of the factors that could affect these expectations, see risk factors and other cautionary language included in the Company’s Annual Report on Form 10-K and other periodic and current reports filed with the Securities and Exchange Commission.

    While there is no assurance that any list of risks and uncertainties or risk factors is complete, below are certain factors which could cause actual results to differ materially from those contained or implied in the forward-looking statements: changes in general economic, political, or industry conditions; geopolitical concerns, including the ongoing wars in Ukraine and in the Middle East; uncertainty in U.S. fiscal and monetary policy, including the interest rate policies of the Board of Governors of the Federal Reserve System; inflation/deflation, interest rate, market, and monetary fluctuations; volatility and disruptions in global capital and credit markets; competitive pressures on product pricing and services; success, impact, and timing of our business strategies, including market acceptance of any new products or services; the impact of changes in financial services policies, laws, and regulations, including those concerning taxes, banking, securities, and insurance, and the application thereof by regulatory bodies; cybersecurity threats and the cost of defending against them, including the costs of compliance with potential legislation to combat cybersecurity at a state, national, or global level; climate change, including any enhanced regulatory, compliance, credit and reputational risks and costs; the expected cost savings, synergies and other financial benefits from the acquisition of IFH or any other acquisition the Company has made or may make might not be realized within the expected time frames or at all; the effect of acquisitions we have made or may make, including, without limitation, the failure to achieve the expected revenue growth and/or expense savings from such acquisitions, and/or the failure to effectively integrate an acquisition target into our operations; and other factors that may affect our future results.

    These forward-looking statements are made as of the date of this communication, and the Company does not intend, and assumes no obligation, to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made or to reflect the occurrence of unanticipated events or circumstances, except as required by law.

    FINANCIAL CONTACT: Dominic Canuso (301) 468-8848 x1403

    MEDIA CONTACT: Ed Barry (240) 283-1912

    WEB SITE: www.CapitalBankMD.com

    The MIL Network –

  • MIL-OSI: Stolt-Nielsen to Purchase Shareholding in Avenir LNG Limited

    Source: GlobeNewswire (MIL-OSI)

    London, 27 January 2025 – Stolt-Nielsen Limited (Oslo Børs: SNI), through its subsidiary Stolt-Nielsen Gas Ltd., has today announced that it has entered into a share purchase agreement to acquire all the shares of Avenir LNG Limited (‘Avenir LNG’) owned by Golar LNG Limited and Aequitas Limited (the ’Transaction’).

    The Transaction is expected to be completed during the first quarter of 2025 (subject to fulfilment of the conditions to closing under the share purchase agreement). Upon completion, Stolt-Nielsen Gas Ltd. will control approximately 94.37% of the outstanding shares and votes in Avenir LNG.

    Avenir LNG is an industry leader in small-scale liquefied natural gas (LNG) supply and is focused on supporting the marine energy transition through one of the largest fleets of small-scale LNG vessels. Avenir LNG owns and operates a fleet of five modern small-scale LNG bunkering vessels, with two newbuildings under construction.

    Commenting on the transaction, Udo Lange, CEO, Stolt-Nielsen Limited said: “I am very pleased to announce this increased investment in Avenir LNG. This strategic move not only strengthens our position in the LNG sector but also underscores our commitment to pursuing more sustainable energy solutions for the maritime, industrial, and power generation markets. I am excited about the possibilities ahead and confident that this partnership will propel us into new avenues of growth and impact.”

    Jonathan Quinn, Managing Director Avenir LNG, added: “Today marks an exciting new chapter for Avenir LNG as we continue to execute our strategy to become the leading small-scale LNG shipping and trading company. On behalf of the entire team at Avenir LNG, I wish to extend my thanks to the founding shareholders whose support and guidance has been instrumental in positioning Avenir LNG at the forefront of the marine energy transition since we launched in October 2018. With the increased support from Stolt-Nielsen Limited, Avenir LNG is well positioned to act dynamically as we pursue our growth strategy in this burgeoning market.”

    Subject to completion of the Transaction, Stolt-Nielsen Gas Ltd. intends to offer to buy the shares of all remaining shareholders in Avenir LNG. Further information about the offer (if launched) will be published on Avenir LNG’s ticker ‘AVENIR’ on Euronext NOTC.

    DNB Markets, a part of DNB Bank ASA, is acting as financial advisor to Stolt-Nielsen Limited.

    This information is considered to be inside information pursuant to the EU Market Abuse Regulation (MAR) and is subject to the disclosure requirements pursuant to MAR article 17 and Section 5-12 the Norwegian Securities Trading Act. This stock exchange announcement was published by Avenir LNG Limited, at the date and time as set out above.

    The MIL Network –

  • MIL-OSI: Norwood Financial Corp announces Fourth Quarter and Full Year 2024 Results

    Source: GlobeNewswire (MIL-OSI)

    Quarterly Highlights:

    • Net interest margin increased 5 basis points vs. the prior quarter and 11 basis points over the prior year.
    • Loans grew at an 9% annualized rate during the fourth quarter.
    • Completed capital raise that supports our long-term strategy and repositions our investment portfolio to improve our yield on the portfolio.
    • Capital continues to improve due to recent equity offering and lower AOCI adjustment.

    HONESDALE, Pa., Jan. 27, 2025 (GLOBE NEWSWIRE) — Norwood Financial Corp (Nasdaq Global Market-NWFL) and its subsidiary, Wayne Bank, announced results for the three months and fiscal year ended December 31, 2024.

    Jim Donnelly, President and Chief Executive Officer of Norwood Financial Corp and Wayne Bank, stated, “During the fourth quarter, we successfully completed a capital raise that enabled us to reposition our investment portfolio for improved yields on the portfolio in future periods. While we incurred a one-time $20 million loss as a result of this repositioning, we believe the portfolio is better positioned for the current and future interest rate environment. Excluding this loss, we performed well during the fourth quarter, delivering higher net interest income year-over-year for both the fourth quarter and the full year. As a result of these actions, we believe the Company is financially stronger and better protected from changes in interest rates and will enhance our future performance.”

    Selected Financial Highlights

    (dollars in thousands, except per share data) Three Months Ended Twelve Months Ended
    December 31, 2024 December 31, 2024
    2024   2023   Change 2024   2023   Change
    Net interest income 16,625   15,293   1,332   62,191   62,067   124  
    Net interest spread (fte) 2.31%   2.23%   8 bps   2.17%   2.47%   (30 bps )
    Net interest margin (fte) 3.04%   2.93%   11 bps   2.91%   3.06%   (15 bps )
    Net income (loss) (12,651 ) 355   (13,006 ) (160 ) 16,759   (16,919 )
    Diluted earnings per share (1.54 ) 0.04   (1.41 ) (0.02 ) 2.07   (2.09 )
    Return on average assets (2.19% ) 0.06%   (225 bps ) -0.01%   0.79%   (80 bps )
    Return on tangible equity (30.77% ) 1.01%   (3,178 bps ) (0.10% ) 11.66%   (1,167 bps )
    Discussion of financial results for the three months ended December 31, 2024:

    • The Company has a net loss of $12.7 million for the three months ended December 31, 2024. This was $13 million lower than the same period last year due one-time $20 million loss incurred on the sale of securities during December.
    • Net interest income was higher during the fourth quarter of 2024 than 2023 as increases in asset yields outpaced increases in yields on liabilities.
    • Correspondingly, the net interest margin in the fourth quarter was 3.04% in 2024 compared to 2.93% in 2023.

    Discussion of financial results for the year ended December 31, 2024:

    • The Company posted a had a net loss of $160 thousand, or -$0.02 per diluted share, for the full-fiscal year ended year December 31, 2024 compared to net income of $16.8 million, or $2.07 per diluted share, for the fiscal year ended December in31. 2023. This loss was primarily due to a one-time $20 million loss incurred on the sale of securities during December 2024.
    • The full-year net interest margin was 2.91% in 2024 versus 3.06% in 2023. Deposit costs were higher in 2024, especially in the earlier part of the year, before the Federal Reserve began to cut rates.
    • Total non-interest expenses for 2024 were $48.6 million compared to $43.5 million in 2023. The increase was generally due to higher compensation and data processing costs.
    • Adjusted net income for the year was lower as higher net interest income and total other income was more than offset by an increase in total other expenses.
    • As of December 31, 2024, total assets were $2.317 billion, compared to $2.201 billion at December 31, 2023. Loans receivable were $1.693 billion, total deposits were $1.859 billion, and stockholders’ equity was $213.5 million.
    • Tangible Common Equity was 8.05% as of December 31, 2024, versus 6.98% at the end of 2023.
    The following non-GAAP financial measures exclude the one-time $20.0 million net realized loss incurred in the fourth quarter as a result of the repositioning of our investment portfolio. Please see “Non-GAAP Financial Measures” below for a reconciliation of all non-GAAP financial measures.
    (dollars in thousands, except per share data) Three Months Ended Twelve Months Ended
    December 31, 2024 December 31, 2024
    2024   2023   Change 2024   2023   Change
    Adjusted net income 3,119   355   2,764   15,610   16,759   (1,149 )
    Adjusted diluted earnings per share 0.38   0.04   0.34   1.93   2.07   (0.14 )
    Adjusted return on average assets 0.54%   0.06%   48 bps 0.69%   0.79%   (10 bps )
    Adjusted return on tangible equity 7.59%   1.01%   654 bps 9.97%   11.66%   (169 bps )

    Norwood Financial Corp is the parent company of Wayne Bank, which operates from 16 offices throughout Northeastern Pennsylvania and 14 offices in 4 Delaware, Sullivan, Ontario, Otsego and Yates Counties, New York. The Company’s stock trades on the Nasdaq Global Market under the symbol “NWFL”.

    Non-GAAP Financial Measures

    This release references adjusted net income, adjusted diluted earnings per share, adjusted return on average assets and adjusted return on tangible equity, all of which are non-GAAP (Generally Accepted Accounting Principles) financial measures. Adjusted values were derived by reversing the effect of loss on sale of securities in 2024 along with the attendant tax effect. We believe the presentation of adjusted net income, adjusted diluted earnings per share, adjusted return on average assets and adjusted return on tangible equity ensures comparability of these measures as the portfolio restructuring is not something the Company expects to be a recurring event.

                                 
    Adjusted Return on Average Assets                            
    (Dollars in thousands)                            
                                 
        Three Months Ended December 31,       Twelve Months Ended December 31,  
        2024   2023       2024       2023  
    Net (loss) income $ (12,651 )   $ 355       $ (160 )   $ 16,759  
    Average assets   2,299,732       2,166,821         2,250,171       2,128,570  
    Return on average assets (annualized)   -2.19 %     0.06 %       -0.01 %     0.79 %
    Net (loss) income   (12,651 )     355         (160 )     16,759  
    Net realized losses on sale of securities   19,962       0         19,962       0  
    Tax effect at 21%   (4,192 )     0         (4,192 )     0  
    Adjusted Net Income (Non-GAAP)   3,119       355         15,610       16,759  
    Average assets   2,299,732       2,166,821         2,250,171       2,128,570  
    Adjusted return on average assets (annualized)                            
    (Non-GAAP)   0.54 %     0.06 %       0.69 %     0.79 %
                                 
                                 
    Adjusted Return on Average Tangible Shareholders’ Equity                            
    (Dollars in thousands)                            
                                 
        Three Months Ended December 31,       Twelve Months Ended December 31,  
        2024   2023       2024       2023  
    Net (loss) income $ (12,651 )   $ 355       $ (160 )   $ 16,759  
    Average shareholders’ equity   192,981       168,317         185,952       173,273  
    Average intangible assets   29,424       29,495         29,449       29,526  
    Average tangible shareholders’ equity   163,557       138,822         156,503       143,747  
    Return on average tangible shareholders’ equity (annualized)   -30.77 %     1.01 %       -0.10 %     11.66 %
    Net (loss) income   (12,651 )     355         (160 )     16,759  
    Net realized losses on sale of securities   19,962       0         19,962       0  
    Tax effect at 21%   (4,192 )     0         (4,192 )     0  
    Adjusted Net Income (Non-GAAP)   3,119       355         15,610       16,759  
    Average tangible shareholders’ equity   163,557       138,822         156,503       143,747  
    Adjusted return on average shareholders’ equity (annualized)                            
    (Non-GAAP)   7.59 %     1.01 %       9.97 %     11.66 %
                                 
                                 
    Adjusted Earnings Per Share                            
    (Dollars in thousands)                            
                                 
        Three Months Ended December 31,       Twelve Months Ended December 31,  
        2024   2023       2024       2023  
    GAAP-Based Earnings Per Share, Basic $ (1.54 )   $ 0.04       $ (0.02 )   $ 2.08  
    GAAP-Based Earnings Per Share, Diluted $ (1.54 )   $ 0.04       $ (0.02 )   $ 2.07  
    Net (Loss) Income   (12,651 )     355         (160 )     16,759  
    Net realized losses on sale of securities   19,962       0         19,962       0  
    Tax effect at 21%   (4,192 )     0         (4,192 )     0  
    Adjusted Net Income (Non-GAAP)   3,119       355         15,610       16,759  
    Adjusted Earnings per Share, Basic (Non-GAAP) $ 0.38     $ 0.04       $ 1.93     $ 2.08  
    Adjusted Earnings per Share, Diluted (Non-GAAP) $ 0.38     $ 0.04       $ 1.93     $ 2.07  

    The following table reconciles average equity to average tangible equity:

    Tangible Book Value          
    (Dollars in thousands)          
               
        December 31,
        2024   2023
    Total shareholders’ equity   213,508       181,070  
    Adjustments:          
    Goodwill   (29,266 )     (29,266 )
    Other intangible assets   (152 )     (221 )
    Tangible common equity (Non-GAAP)   184,090       151,583  
    Common shares outstanding   9,272,906       8,110,157  
    Book value per common share   23.02       22.33  
    Tangible book value per common share (Non-GAAP)   19.85       18.69  

    Forward-Looking Statements

    The Private Securities Litigation Reform Act of 1995 contains safe harbor provisions regarding forward-looking statements. When used in this discussion, the words “believes”, “anticipates”, “contemplates”, “expects”, “bode”, “future performance” and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from those projected. Those risks and uncertainties include, among other things, changes in federal and state laws, changes in interest rates, our ability to maintain strong credit quality metrics, our ability to have future performance, our ability to control core operating expenses and costs, demand for real estate, government fiscal and trade policies, cybersecurity and general economic conditions. The Company undertakes no obligation to publicly release the results of any revisions to those forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

    Contact: John M. McCaffery
      Executive Vice President &
      Chief Financial Officer
      NORWOOD FINANCIAL CORP
      272-304-3003
      www.waynebank.com
               
    NORWOOD FINANCIAL CORP          
    Consolidated Balance Sheets          
    (dollars in thousands, except share and per share data)          
     (unaudited)          
        December 31
        2024       2023  
    ASSETS          
    Cash and due from banks  $ 27,562     $ 28,533  
    Interest-bearing deposits with banks   44,777       37,587  
    Cash and cash equivalents   72,339       66,120  
               
    Securities available for sale   397,846       406,259  
    Loans receivable   1,713,638       1,603,618  
    Less: Allowance for credit losses   19,843       18,968  
    Net loans receivable   1,693,795       1,584,650  
    Regulatory stock, at cost   13,366       7,318  
    Bank premises and equipment, net   19,657       17,838  
    Bank owned life insurance   46,657       46,439  
    Foreclosed real estate owned   –       97  
    Accrued interest receivable   8,466       8,123  
    Deferred tax assets, net   17,696       21,353  
    Goodwill   29,266       29,266  
    Other intangible assets   152       221  
    Other assets   18,222       13,395  
    TOTAL ASSETS  $ 2,317,462     $ 2,201,079  
               
    LIABILITIES          
    Deposits:          
    Non-interest bearing demand  $ 381,479     $ 399,545  
    Interest-bearing   1,477,684       1,395,614  
    Total deposits   1,859,163       1,795,159  
    Short-term borrowings   113,069       74,076  
    Other borrowings   101,793       124,236  
    Accrued interest payable   12,615       10,510  
    Other liabilities   17,314       16,028  
    TOTAL LIABILITIES   2,103,954       2,020,009  
               
    STOCKHOLDERS’ EQUITY          
    Preferred Stock, no par value per share, authorized 5,000,000 shares –       –  
    Common Stock, $.10 par value per share,          
    authorized: 20,000,000 shares,          
    issued: 2024: 9,487,067 shares, 2023: 8,310,847 shares   949       831  
    Surplus   98,513       97,700  
    Retained earnings   152,964       135,284  
    Treasury stock, at cost: 2024: 214,161 shares, 2023: 200,690 shares (5,797 )     (5,397 )
    Accumulated other comprehensive loss   (33,121 )     (47,348 )
    TOTAL STOCKHOLDERS’ EQUITY   213,508       181,070  
               
    TOTAL LIABILITIES AND          
    STOCKHOLDERS’ EQUITY  $ 2,317,462     $ 2,201,079  
               
    NORWOOD FINANCIAL CORP                    
    Consolidated Statements of Income                    
    (dollars in thousands, except per share data)                    
      (unaudited)                    
      Three Months Ended December 31,     Twelve Months Ended December 31,
          2024       2023         2024       2023  
    INTEREST INCOME                    
    Loans receivable, including fees $   26,122   $   23,328     $   99,388   $   85,209  
    Securities     2,789       2,504         10,424       9,922  
    Other     574       253         2,768       409  
    Total Interest income     29,485       26,085         112,580       95,540  
                         
    INTEREST EXPENSE                    
    Deposits     10,984       8,910         42,334       26,029  
    Short-term borrowings     348       346         1,363       3,048  
    Other borrowings     1,528       1,536         6,692       4,396  
    Total Interest expense     12,860       10,792         50,389       33,473  
    NET INTEREST INCOME     16,625       15,293         62,191       62,067  
    PROVISION FOR CREDIT LOSSES   $ 1,604     $ 6,116       $ 2,673     $ 5,548  
    NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES     15,021       9,177         59,518       56,519  
                         
                         
    OTHER INCOME                    
    Service charges and fees     1,595       1,421         5,959       5,613  
    Income from fiduciary activities     224       210         943       898  
    Net realized (losses) gains on sales of securities     (19,962 )     –         (19,962 )     (209 )
    Gains on sales of loans, net     50       36         195       63  
    Gains on sales of foreclosed real estate owned     –       66         32       80  
    Earnings and proceeds on life insurance policies     275       242         1,056       1,012  
    Other     159       148         626       667  
    Total other income     (17,659 )     2,123         (11,151 )     8,124  
                         
    OTHER EXPENSES                    
    Salaries and employee benefits     6,690       5,672         25,018       23,565  
    Occupancy, furniture and equipment     1,291       1,265         5,049       5,083  
    Data processing and related operations     1,312       877         4,520       3,342  
    Taxes, other than income     163       77         615       566  
    Professional fees     504       544         2,173       1,676  
    FDIC Insurance assessment     335       287         1,344       985  
    Foreclosed real estate     9       17         54       129  
    Amortization of intangibles     15       19         69       85  
    Other     3,100       2,091         9,783       8,066  
    Total other expenses     13,419       10,849         48,625       43,497  
                         
    INCOME BEFORE TAX (BENEFIT) EXPENSE     (16,057 )     451         (258 )     21,146  
    INCOME TAX (BENEFIT) EXPENSE     (3,406 )     96         (98 )     4,387  
    NET (LOSS) INCOME  $   (12,651 ) $   355      $   (160 ) $   16,759  
                         
    Basic (loss) earnings per share $   (1.54 ) $   0.04     $   (0.02 ) $   2.08  
                         
    Diluted (loss) earnings per share $   (1.54 ) $   0.04     $   (0.02 ) $   2.07  
                         
    NORWOOD FINANCIAL CORP              
    NET INTEREST MARGIN ANALYSIS              
    (dollars in thousands)              
                                         
      For the Quarter Ended
      December 31, 2024 September 30, 2024 December 31, 2023
      Average   Average   Average   Average   Average   Average  
      Balance Interest    Rate   Balance Interest     Rate   Balance Interest     Rate  
      (2)   (1)   (3)   (2)   (1)   (3)   (2)   (1)   (3)  
    Assets                                    
    Interest-earning assets:                                    
    Interest-bearing deposits with banks $ 46,629   $ 574   4.90 % $ 36,221   $ 497   5.46 % $ 18,282   $ 253   5.49 %
    Securities available for sale:                                    
    Taxable   404,777     2,434   2.39     392,168     2,161   2.19     403,044     2,126   2.09  
    Tax-exempt (1)   65,628     449   2.72     67,563     461   2.71     70,049     479   2.71  
    Total securities available for sale (1)   470,405     2,883   2.44     459,731     2,622   2.27     473,093     2,605   2.18  
    Loans receivable (1) (4) (5)   1,690,650     26,246   6.18     1,651,921     25,575   6.16     1,605,496     23,422   5.79  
    Total interest-earning assets   2,207,684     29,703   5.35     2,147,873     28,694   5.31     2,096,871     26,280   4.97  
    Non-interest earning assets:                                    
    Cash and due from banks   27,283             28,193             27,791          
    Allowance for credit losses   (18,741 )           (17,944 )           (16,728 )        
    Other assets   83,506             78,344             58,231          
    Total non-interest earning assets   92,048             88,593             69,294          
    Total Assets $ 2,299,732           $ 2,236,466           $ 2,166,165          
    Liabilities and Stockholders’ Equity                                    
    Interest-bearing liabilities:                                    
    Interest-bearing demand and money market $ 528,330   $ 3,017   2.27   $ 461,897   $ 2,782   2.40   $ 463,792   $ 2,059   1.76  
    Savings   209,362     162   0.31     221,366     13   0.02     226,809     119   0.21  
    Time   764,819     7,805   4.06     734,235     7,758   4.20     679,587     6,732   3.93  
    Total interest-bearing deposits   1,502,511     10,984   2.91     1,417,498     10,553   2.96     1,370,188     8,910   2.58  
    Short-term borrowings   46,267     348   2.99     53,622     323   2.40     59,836     346   2.29  
    Other borrowings   133,620     1,528   4.55     146,357     1,680   4.57     131,071     1,536   4.65  
       Total interest-bearing liabilities   1,682,398     12,860   3.04     1,617,477     12,556   3.09     1,561,095     10,792   2.74  
    Non-interest bearing liabilities:                                    
    Demand deposits   394,001             400,314             411,434          
    Other liabilities   30,352             29,540             25,316          
    Total non-interest bearing liabilities   424,353             429,854             436,750          
    Stockholders’ equity   192,981             189,135             168,320          
    Total Liabilities and Stockholders’ Equity $ 2,299,732           $ 2,236,466           $ 2,166,165          
    Net interest income/spread (tax equivalent basis)       16,843   2.31 %       16,138   2.23 %       15,488   2.23 %
    Tax-equivalent basis adjustment       (218 )           (207 )           (195 )    
    Net interest income     $ 16,625           $ 15,931           $ 15,293      
    Net interest margin (tax equivalent basis)         3.04 %         2.99 %         2.93 %
                                         
    (1) Interest and yields are presented on a tax-equivalent basis using a marginal tax rate of 21%.  
    (2) Average balances have been calculated based on daily balances.  
    (3) Annualized  
    (4) Loan balances include non-accrual loans and are net of unearned income.  
    (5) Loan yields include the effect of amortization of deferred fees, net of costs.  
                                         
                                         
      Year to Date
      December 31, 2024 September 30, 2024 December 31, 2023
      Average   Average   Average   Average   Average   Average  
      Balance Interest    Rate   Balance Interest     Rate   Balance Interest     Rate  
      (2)   (1)   (3)   (2)   (1)   (3)   (2)   (1)   (3)  
    Assets                                    
    Interest-earning assets:                                    
    Interest-bearing deposits with banks $ 51,433   $ 2,768   5.38 % $ 53,046   $ 2,194   5.52 % $ 7,537   $ 409   5.43 %
    Securities available for sale:                                    
    Taxable   400,050     8,948   2.24     398,462     6,514   2.18     411,633     8,390   2.04  
    Tax-exempt (1)   68,041     1,868   2.75     68,852     1,419   2.75     70,598     1,940   2.75  
    Total securities available for sale (1)   468,091     10,816   2.31     467,314     7,933   2.27     482,231     10,330   2.14  
    Loans receivable (1) (4) (5)   1,646,128     99,815   6.06     1,631,179     73,569   6.02     1,565,665     85,550   5.46  
    Total interest-earning assets   2,165,652     113,399   5.24     2,151,539     83,696   5.20     2,055,433     96,289   4.68  
    Non-interest earning assets:                                    
    Cash and due from banks   26,629             26,409             26,633          
    Allowance for credit losses   (18,450 )           (18,353 )           (18,122 )        
    Other assets   76,340             73,935             64,626          
    Total non-interest earning assets   84,519             81,991             73,137          
    Total Assets $ 2,250,171           $ 2,233,530           $ 2,128,570          
    Liabilities and Stockholders’ Equity                                    
    Interest-bearing liabilities:                                    
    Interest-bearing demand and money market $ 476,106   $ 10,506   2.21   $ 460,579   $ 7,489   2.17   $ 466,329   $ 5,824   1.25  
    Savings   220,190     711   0.32     223,825     549   0.33     248,629     378   0.15  
    Time   744,895     31,117   4.18     738,205     23,311   4.22     610,726     19,827   3.25  
    Total interest-bearing deposits   1,441,191     42,334   2.94     1,422,609     31,349   2.94     1,325,684     26,029   1.96  
    Short-term borrowings   54,867     1,363   2.48     57,754     1,015   2.35     93,455     3,048   3.26  
    Other borrowings   146,195     6,692   4.58     150,418     5,165   4.59     94,931     4,396   4.63  
    Total interest-bearing liabilities   1,642,253     50,389   3.07     1,630,781     37,529   3.07     1,514,070     33,473   2.21  
    Non-interest bearing liabilities:                                    
    Demand deposits   393,616             391,479             418,631          
    Other liabilities   28,350             27,677             22,595          
    Total non-interest bearing liabilities   421,966             419,156             441,226          
    Stockholders’ equity   185,952             183,593             173,274          
    Total Liabilities and Stockholders’ Equity $ 2,250,171           $ 2,233,530           $ 2,128,570          
    Net interest income/spread (tax equivalent basis)       63,010   2.17 %       46,167   2.12 %       62,816   2.47 %
    Tax-equivalent basis adjustment       (819 )           (601 )           (749 )    
    Net interest income     $ 62,191           $ 45,566           $ 62,067      
    Net interest margin (tax equivalent basis)         2.91 %         2.87 %         3.06 %
                                         
    (1) Interest and yields are presented on a tax-equivalent basis using a marginal tax rate of 21%.  
    (2) Average balances have been calculated based on daily balances.  
    (3) Annualized  
    (4) Loan balances include non-accrual loans and are net of unearned income.  
    (5) Loan yields include the effect of amortization of deferred fees, net of costs.  
    NORWOOD FINANCIAL CORP          
    Financial Highlights (Unaudited)          
    (dollars in thousands, except per share data)          
               
    For the Three Months Ended December 31   2024       2023  
               
    Net interest income $ 16,625     $ 15,293  
    Net (loss) income   (12,651 )     355  
               
    Net interest spread (fully taxable equivalent)   2.31%       2.23%  
    Net interest margin (fully taxable equivalent)   3.04%       2.93%  
    Return on average assets   -2.19%       0.06%  
    Return on average equity   -26.08%       0.84%  
    Return on average tangible equity   -30.77%       1.01%  
    Basic (loss) earnings per share $ (1.54 )   $ 0.04  
    Diluted (loss) earnings per share $ (1.54 )   $ 0.04  
               
    For the Twelve Months Ended December 31   2024       2023  
               
    Net interest income $ 62,191     $ 62,067  
    Net (loss) income   (160 )     16,759  
               
    Net interest spread (fully taxable equivalent)   2.17%       2.47%  
    Net interest margin (fully taxable equivalent)   2.91%       3.06%  
    Return on average assets   -0.01%       0.79%  
    Return on average equity   -0.09%       9.67%  
    Return on average tangible equity   -0.10%       11.66%  
    Basic (loss) earnings per share $ (0.02 )   $ 2.08  
    Diluted (loss) earnings per share $ (0.02 )   $ 2.07  
               
    As of December 31   2024       2023  
               
    Total assets $ 2,317,462     $ 2,201,079  
    Total loans receivable   1,713,638       1,603,618  
    Allowance for credit losses   19,843       18,968  
    Total deposits   1,859,163       1,795,159  
    Stockholders’ equity   213,508       181,070  
    Trust assets under management   205,097       192,374  
               
    Book value per share $ 23.02     $ 22.33  
    Tangible book value per share $ 19.85     $ 18.69  
    Equity to total assets   9.21%       8.23%  
    Allowance to total loans receivable   1.16%       1.18%  
    Nonperforming loans to total loans   0.46%       0.48%  
    Nonperforming assets to total assets   0.34%       0.35%  
               
    NORWOOD FINANCIAL CORP                    
    Consolidated Balance Sheets (unaudited)                    
    (dollars in thousands)                    
        December 31   September 30 June 30   March 31   December 31
        2024     2024     2024     2024     2023  
    ASSETS                    
    Cash and due from banks $ 27,562   $ 47,072   $ 29,903   $ 19,519   $ 28,533  
    Interest-bearing deposits with banks   44,777     35,808     39,492     92,444     37,587  
    Cash and cash equivalents   72,339     82,880     69,395     111,963     66,120  
                         
    Securities available for sale   397,846     396,891     397,578     398,374     406,259  
    Loans receivable   1,713,638     1,675,139     1,641,356     1,621,448     1,603,618  
    Less: Allowance for credit losses   19,843     18,699     17,807     18,020     18,968  
    Net loans receivable   1,693,795     1,656,440     1,623,549     1,603,428     1,584,650  
    Regulatory stock, at cost   13,366     6,329     6,443     6,545     7,318  
    Bank owned life insurance   46,657     46,382     46,121     45,869     46,439  
    Bank premises and equipment, net   19,657     18,503     18,264     18,057     17,838  
    Foreclosed real estate owned   0     0     0     97     97  
    Goodwill and other intangibles   29,418     29,433     29,449     29,468     29,487  
    Other assets   44,384     42,893     44,517     46,622     42,871  
    TOTAL ASSETS $ 2,317,462   $ 2,279,751   $ 2,235,316   $ 2,260,423   $ 2,201,079  
                         
    LIABILITIES                    
    Deposits:                    
    Non-interest bearing demand $ 381,479   $ 420,967   $ 391,849   $ 383,362   $ 399,545  
    Interest-bearing deposits   1,477,684     1,434,284     1,419,323     1,455,636     1,395,614  
    Total deposits   1,859,163     1,855,251     1,811,172     1,838,998     1,795,159  
    Borrowings   214,862     197,412     210,422     211,234     198,312  
    Other liabilities   29,929     31,434     31,534     28,978     26,538  
    TOTAL LIABILITIES   2,103,954     2,084,097     2,053,128     2,079,210     2,020,009  
                         
    STOCKHOLDERS’ EQUITY   213,508     195,654     182,188     181,213     181,070  
                         
    TOTAL LIABILITIES AND                    
    STOCKHOLDERS’ EQUITY $ 2,317,462   $ 2,279,751   $ 2,235,316   $ 2,260,423   $ 2,201,079  
                         
                         
                         
    NORWOOD FINANCIAL CORP                    
    Consolidated Statements of Income (unaudited)                    
    (dollars in thousands, except per share data)                    
        December 31   September 30 June 30   March 31   December 31
    Three months ended   2024     2024     2024     2024     2023  
    INTEREST INCOME                    
    Loans receivable, including fees $ 26,122   $ 25,464   $ 24,121   $ 23,681   $ 23,328  
    Securities   2,789     2,526     2,584     2,526     2,504  
    Other   574     497     966     731     253  
    Total interest income   29,485     28,487     27,671     26,938     26,085  
                         
    INTEREST EXPENSE                    
    Deposits   10,984     10,553     10,687     10,110     8,910  
    Borrowings   1,876     2,003     2,059     2,118     1,882  
    Total interest expense   12,860     12,556     12,746     12,228     10,792  
    NET INTEREST INCOME   16,625     15,931     14,925     14,710     15,293  
    PROVISION FOR (RELEASE OF) CREDIT LOSSES   1,604     1,345     347     (624 )   6,116  
    NET INTEREST INCOME AFTER (RELEASE OF) PROVISION                    
    FOR CREDIT LOSSES   15,021     14,586     14,578     15,334     9,177  
                         
    OTHER INCOME                    
    Service charges and fees   1,595     1,517     1,504     1,343     1,421  
    Income from fiduciary activities   224     256     225     238     210  
    Net realized (losses) gains on sales of securities   (19,962 )   –     –     –     –  
    Gains on sales of loans, net   50     103     36     6     36  
    Gains on sales of foreclosed real estate owned   –     –     32     –     66  
    Earnings and proceeds on life insurance policies   275     261     253     268     242  
    Other   159     158     157     151     148  
    Total other income   (17,659 )   2,295     2,207     2,006     2,123  
                         
    OTHER EXPENSES                    
    Salaries and employee benefits   6,690     6,239     5,954     6,135     5,672  
    Occupancy, furniture and equipment, net   1,291     1,269     1,229     1,261     1,265  
    Foreclosed real estate   9     9     15     21     17  
    FDIC insurance assessment   335     339     309     361     287  
    Other   5,094     4,175     3,937     3,954     3,608  
    Total other expenses   13,419     12,031     11,444     11,732     10,849  
                         
    INCOME BEFORE TAX (BENEFIT) EXPENSE   (16,057 )   4,850     5,341     5,608     451  
    INCOME TAX (BENEFIT) EXPENSE   (3,406 )   1,006     1,128     1,175     96  
    NET (LOSS) INCOME $ (12,651 ) $ 3,844   $ 4,213   $ 4,433   $ 355  
                         
    Basic (loss) earnings per share $ (1.54 ) $ 0.48   $ 0.52   $ 0.55   $ 0.04  
                         
    Diluted (loss) earnings per share $ (1.54 ) $ 0.48   $ 0.52   $ 0.55   $ 0.04  
                         
    Book Value per share $ 23.02   $ 24.92   $ 23.26   $ 23.01   $ 22.99  
    Tangible Book Value per share   19.85     21.28     19.62     19.38     19.36  
                         
    Return on average assets (annualized)   -2.19 %   0.68%     0.75%     0.80%     0.06%  
    Return on average equity (annualized)   -26.08 %   8.09%     9.41%     9.79%     0.84%  
    Return on average tangible equity (annualized)   -30.77 %   9.58%     11.26%     11.68%     1.01%  
                         
    Net interest spread (fte)   2.31%     2.23%     2.06%     2.06%     2.23%  
    Net interest margin (fte)   3.04%     2.99%     2.80%     2.79%     2.93%  
                         
    Allowance for credit losses to total loans   1.16%     1.12%     1.08%     1.11%     1.18%  
    Net charge-offs to average loans (annualized)   0.12%     0.08%     0.13%     0.08%     0.79%  
    Nonperforming loans to total loans   0.46%     0.47%     0.47%     0.23%     0.48%  
    Nonperforming assets to total assets   0.34%     0.35%     0.34%     0.17%     0.35%  

    The MIL Network –

  • MIL-OSI: Park National Corporation reports 2024 results

    Source: GlobeNewswire (MIL-OSI)

    NEWARK, Ohio, Jan. 27, 2025 (GLOBE NEWSWIRE) — Park National Corporation (Park) (NYSE American: PRK) today reported financial results for the fourth quarter and full year of 2024. Park’s board of directors declared a quarterly cash dividend of $1.07 per common share, payable on March 10, 2025, to common shareholders of record as of February 14, 2025.

    “Our consistent and measured growth stems from our team’s absolute focus on meeting customer needs to produce meaningful results,” said Park Chairman and Chief Executive Officer David Trautman. “Helping customers flourish remains our primary goal.”

    Park’s net income for the fourth quarter of 2024 was $38.6 million, a 57.7 percent increase from $24.5 million for the fourth quarter of 2023. Fourth quarter 2024 net income per diluted common share was $2.37, compared to $1.51 for the fourth quarter of 2023. Park’s net income for the full year of 2024 was $151.4 million, a 19.5 percent increase from $126.7 million for the full year of 2023. Net income per diluted common share for the full year of 2024 was $9.32 compared to $7.80 for the full year of 2023.

    Park’s total loans increased 4.6 percent during 2024. Park’s total deposits increased 1.3 percent during 2024, with an increase of 2.7 percent including off balance sheet deposits. The combination of solid loan growth and steady deposits contributed to Park’s success in 2024.

    “As we enter the new year, we look forward to the opportunity to deepen relationships with our customers, communities and all stakeholders,” said Park President Matthew Miller. “Our bankers are dedicated to helping all those we serve achieve their financial goals and thrive in 2025.”

    Headquartered in Newark, Ohio, Park National Corporation has $9.8 billion in total assets (as of December 31, 2024). Park’s banking operations are conducted through its subsidiary The Park National Bank. Other Park subsidiaries are Scope Leasing, Inc. (d.b.a. Scope Aircraft Finance), Guardian Financial Services Company (d.b.a. Guardian Finance Company) and SE Property Holdings, LLC.

    Complete financial tables are listed below.

    Category: Earnings

    SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

    Park cautions that any forward-looking statements contained in this news release or made by management of Park are provided to assist in the understanding of anticipated future financial performance. Forward-looking statements provide current expectations or forecasts of future events and are not guarantees of future performance. The forward-looking statements are based on management’s expectations and are subject to a number of risks and uncertainties, including those described in Park’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023, as updated by our filings with the SEC. Although management believes that the expectations reflected in such forward-looking statements are reasonable, actual results may differ materially from those expressed or implied in such statements.

    Risks and uncertainties that could cause actual results to differ materially include, without limitation: (1) Park’s ability to execute our business plan successfully and within the expected timeframe; (2) adverse changes in future economic and financial market conditions; (3) adverse changes in real estate values and liquidity in our primary market areas; (4) the financial health of our commercial borrowers; (5) adverse changes in federal, state and local governmental law and policy, including the regulatory landscape, capital markets, elevated government debt, potential changes in tax legislation, government shutdown, infrastructure spending and social programs; (6) changes in consumer spending, borrowing and saving habits; (7) our litigation and regulatory compliance exposure; (8) increased credit risk and higher credit losses resulting from loan concentrations; (9) competitive pressures among financial services organizations; (10) changes in accounting policies and practices as may be adopted by regulatory agencies; (11) Park’s assumptions and estimates used in applying critical accounting policies and modeling which may prove unreliable, inaccurate or not predictive of actual results; (12) Park’s ability to anticipate and respond to technological changes and Park’s reliance on, and the potential failure of, a number of third-party vendors to perform as expected; (13) failures in or breaches of Park’s operational or security systems or infrastructure, or those of our third-party vendors and other service providers; (14) negative impacts on financial markets and the economy of any changes in the credit ratings of the U.S. Treasury obligations and other U.S. government-backed debt, as well as issues surrounding the levels of U.S., European and Asian government debt and concerns regarding the growth rates and financial stability of certain sovereign governments, supranationals and financial institutions in Europe and Asia; (15) effects of a fall in stock market prices on Park’s asset and wealth management businesses; (16) continued availability of earnings and excess capital sufficient for the lawful and prudent declaration of dividends; (17) the impact on Park’s business, personnel, facilities or systems of losses related to acts of fraud, scams and schemes of third parties; (18) the impact of widespread natural and other disasters, pandemics, dislocations, regional or national protests and civil unrest (including any resulting branch closures or damages), military or terrorist activities or international hostilities on the economy and financial markets generally and on us or our counterparties specifically; (19) the potential further deterioration of the U.S. economy due to financial, political, or other shocks; (20) the effect of healthcare laws in the U.S. and potential changes for such laws that may increase our healthcare and other costs and negatively impact our operations and financial results; (21) the impact of larger or similar-sized financial institutions encountering problems that may adversely affect the banking industry; and (22) other risk factors relating to the financial services industry.

    Park does not undertake, and specifically disclaims any obligation, to publicly release the results of any revisions that may be made to update any forward-looking statement to reflect the events or circumstances after the date on which the forward-looking statement was made, or reflect the occurrence of unanticipated events, except to the extent required by law.

       
    PARK NATIONAL CORPORATION  
    Financial Highlights  
    As of or for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023  
                     
        2024       2024       2023       Percent change vs.  
    (in thousands, except common share and per common share data and ratios) 4th QTR 3rd QTR 4th QTR   3Q ’24   4Q ’23  
    INCOME STATEMENT:                
    Net interest income $ 103,445     $ 101,114     $ 95,074       2.3   % 8.8   %
    Provision for credit losses   3,935       5,315       1,809       (26.0 ) % 117.5   %
    Other income   31,064       36,530       15,519       (15.0 ) % 100.2   %
    Other expense   83,241       85,681       79,043       (2.8 ) % 5.3   %
    Income before income taxes $ 47,333     $ 46,648     $ 29,741       1.5   % 59.2   %
    Income taxes   8,703       8,431       5,241       3.2   % 66.1   %
    Net income $ 38,630     $ 38,217     $ 24,500       1.1   % 57.7   %
                     
    MARKET DATA:                
    Earnings per common share – basic (a) $ 2.39     $ 2.37     $ 1.52       0.8   % 57.2   %
    Earnings per common share – diluted (a)   2.37       2.35       1.51       0.9   % 57.0   %
    Quarterly cash dividend declared per common share   1.06       1.06       1.05       —   % 1.0   %
    Special cash dividend declared per common share   0.50       —       —       N.M.   N.M.  
    Book value per common share at period end   76.98       76.74       71.06       0.3   % 8.3   %
    Market price per common share at period end   171.43       167.98       132.86       2.1   % 29.0   %
    Market capitalization at period end   2,770,134       2,713,152       2,141,235       2.1   % 29.4   %
                     
    Weighted average common shares – basic (b)   16,156,827       16,151,640       16,113,215       —   % 0.3   %
    Weighted average common shares – diluted (b)   16,283,701       16,264,393       16,216,562       0.1   % 0.4   %
    Common shares outstanding at period end   16,158,982       16,151,640       16,116,479       —   % 0.3   %
                     
    PERFORMANCE RATIOS: (annualized)                
    Return on average assets (a)(b)   1.54   %   1.53   %   0.98   %   0.7   % 57.1   %
    Return on average shareholders’ equity (a)(b)   12.32   %   12.56   %   8.81   %   (1.9 ) % 39.8   %
    Yield on loans   6.21   %   6.24   %   5.84   %   (0.5 ) % 6.3   %
    Yield on investment securities   3.46   %   3.74   %   3.88   %   (7.5 ) % (10.8 ) %
    Yield on money market instruments   4.75   %   5.38   %   5.30   %   (11.7 ) % (10.4 ) %
    Yield on interest earning assets   5.82   %   5.88   %   5.48   %   (1.0 ) % 6.2   %
    Cost of interest bearing deposits   1.90   %   2.06   %   1.84   %   (7.8 ) % 3.3   %
    Cost of borrowings   3.86   %   3.97   %   4.42   %   (2.8 ) % (12.7 ) %
    Cost of paying interest bearing liabilities   1.99   %   2.15   %   2.01   %   (7.4 ) % (1.0 ) %
    Net interest margin (g)   4.51   %   4.45   %   4.17   %   1.3   % 8.2   %
    Efficiency ratio (g)   61.60   %   61.98   %   70.93   %   (0.6 ) % (13.2 ) %
                     
    OTHER DATA (NON-GAAP) AND BALANCE SHEET INFORMATION:                
    Tangible book value per common share (d) $ 66.89     $ 66.62     $ 60.87       0.4   % 9.9   %
    Average interest earning assets   9,176,540       9,100,594       9,120,407       0.8   % 0.6   %
    Pre-tax, pre-provision net income (j)   51,268       51,963       31,550       (1.3 ) % 62.5   %
                     
    Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.  
                     
                     
    PARK NATIONAL CORPORATION  
    Financial Highlights (continued)  
    As of or for the three months ended December 31, 2024, September 30, 2024 and December 31, 2023
    		  
                     
              Percent change vs.  
    (in thousands, except ratios) December 31,
    2024    		 September 30,
    2024    		 December 31,
    2023    		   3Q ’24   4Q ’23  
    BALANCE SHEET:                
    Investment securities $ 1,100,861     $ 1,233,297     $ 1,429,144       (10.7 ) % (23.0 ) %
    Loans   7,817,128       7,730,984       7,476,221       1.1   % 4.6   %
    Allowance for credit losses   87,966       87,237       83,745       0.8   % 5.0   %
    Goodwill and other intangible assets   163,032       163,320       164,247       (0.2 ) % (0.7 ) %
    Other real estate owned (OREO)   938       1,119       983       (16.2 ) % (4.6 ) %
    Total assets   9,805,350       9,903,049       9,836,453       (1.0 ) % (0.3 ) %
    Total deposits   8,143,526       8,214,671       8,042,566       (0.9 ) % 1.3   %
    Borrowings   280,083       306,964       517,329       (8.8 ) % (45.9 ) %
    Total shareholders’ equity   1,243,848       1,239,413       1,145,293       0.4   % 8.6   %
    Tangible equity (d)   1,080,816       1,076,093       981,046       0.4   % 10.2   %
    Total nonperforming loans   69,932       71,541       61,118       (2.2 ) % 14.4   %
    Total nonperforming assets   70,870       72,660       62,101       (2.5 ) % 14.1   %
                     
    ASSET QUALITY RATIOS:                
    Loans as a % of period end total assets   79.72   %   78.07   %   76.01   %   2.1   % 4.9   %
    Total nonperforming loans as a % of period end loans   0.89   %   0.93   %   0.82   %   (4.3 ) % 8.5   %
    Total nonperforming assets as a % of period end loans + OREO + other nonperforming assets   0.91   %   0.94   %   0.83   %   (3.2 ) % 9.6   %
    Allowance for credit losses as a % of period end loans   1.13   %   1.13   %   1.12   %   —   % 0.9   %
    Net loan charge-offs $ 3,206     $ 4,653     $ 2,666       (31.1 ) % 20.3   %
    Annualized net loan charge-offs as a % of average loans (b)   0.16   %   0.24   %   0.14   %   (33.3 ) % 14.3   %
                     
    CAPITAL & LIQUIDITY:                
    Total shareholders’ equity / Period end total assets   12.69   %   12.52   %   11.64   %   1.4   % 9.0   %
    Tangible equity (d) / Tangible assets (f)   11.21   %   11.05   %   10.14   %   1.4   % 10.6   %
    Average shareholders’ equity / Average assets (b)   12.47   %   12.20   %   11.16   %   2.2   % 11.7   %
    Average shareholders’ equity / Average loans (b)   16.08   %   15.76   %   14.94   %   2.0   % 7.6   %
    Average loans / Average deposits (b)   93.00   %   92.69   %   89.48   %   0.3   % 3.9   %
                     
    Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.      
               
       
    PARK NATIONAL CORPORATION  
    Financial Highlights  
    Year months ended December 31, 2024 and December 31, 2023        
               
    (in thousands, except common share and per common share data and ratios)   2024       2023       Percent change vs ’23  
    INCOME STATEMENT:          
    Net interest income $ 398,019     $ 373,113       6.7   %
    Provision for credit losses   14,543       2,904       400.8   %
    Other income   122,588       92,634       32.3   %
    Other expense   321,339       309,239       3.9   %
    Income before income taxes $ 184,725     $ 153,604       20.3   %
    Income taxes   33,305       26,870       23.9   %
    Net income $ 151,420     $ 126,734       19.5   %
               
    MARKET DATA:          
    Earnings per common share – basic (a) $ 9.38     $ 7.84       19.6   %
    Earnings per common share – diluted (a)   9.32       7.80       19.5   %
    Quarterly cash dividend declared per common share   4.24       4.20       1.0   %
    Special cash dividend declared per common share   0.50       —       N.M.    
               
    Weighted average common shares – basic (b)   16,143,708       16,163,500       (0.1 ) %
    Weighted average common shares – diluted (b)   16,244,797       16,250,019       —   %
               
    PERFORMANCE RATIOS:          
    Return on average assets (a)(b)   1.53   %   1.27   %   20.5   %
    Return on average shareholders’ equity (a)(b)   12.65   %   11.55   %   9.5   %
    Yield on loans   6.14   %   5.55   %   10.6   %
    Yield on investment securities   3.74   %   3.73   %   0.3   %
    Yield on money market instruments   5.16   %   5.00   %   3.2   %
    Yield on interest earning assets   5.78   %   5.18   %   11.6   %
    Cost of interest bearing deposits   1.97   %   1.52   %   29.6   %
    Cost of borrowings   4.05   %   3.79   %   6.9   %
    Cost of paying interest bearing liabilities   2.08   %   1.67   %   24.6   %
    Net interest margin (g)   4.41   %   4.11   %   7.3   %
    Efficiency ratio (g)   61.44   %   65.87   %   (6.7 ) %
               
    ASSET QUALITY RATIOS:          
    Net loan charge-offs $ 10,322     $ 4,921       109.8   %
    Net loan charge-offs as a % of average loans (b)   0.14   %   0.07   %   100.0   %
               
    CAPITAL & LIQUIDITY          
    Average shareholders’ equity / Average Assets (b)   12.09   %   11.02   %   9.7   %
    Average shareholders’ equity / Average loans (b)   15.69   %   15.19   %   3.3   %
    Average loans / Average deposits (b)   92.34   %   86.39   %   6.9   %
               
    OTHER DATA (NON-GAAP) AND BALANCE SHEET INFORMATION:          
    Average interest earning assets   9,085,850       9,171,721       (0.9 ) %
    Pre-tax, pre-provision net income (j)   199,268       156,508       27.3   %
               
    Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.  
       
     
    PARK NATIONAL CORPORATION
    Consolidated Statements of Income
                     
        Three Months Ended   Twelve Month Ended
        December 31   December 31
    (in thousands, except share and per share data)     2024     2023     2024     2023
                     
    Interest income:                
    Interest and fees on loans   $ 120,870   $ 108,495   $ 467,602   $ 399,795
    Interest on debt securities:                
    Taxable     8,641     13,055     41,718     52,786
    Tax-exempt     1,351     2,248     5,524     10,966
    Other interest income     2,751     1,408     8,121     8,123
    Total interest income     133,613     125,206     522,965     471,670
                     
    Interest expense:                
    Interest on deposits:                
    Demand and savings deposits     19,802     19,467     82,789     71,776
    Time deposits     7,658     6,267     29,594     12,677
    Interest on borrowings     2,708     4,398     12,563     14,104
    Total interest expense     30,168     30,132     124,946     98,557
                     
    Net interest income     103,445     95,074     398,019     373,113
                     
    Provision for credit losses     3,935     1,809     14,543     2,904
                     
    Net interest income after provision for credit losses     99,510     93,265     383,476     370,209
                     
    Other income     31,064     15,519     122,588     92,634
                     
    Other expense     83,241     79,043     321,339     309,239
                     
    Income before income taxes     47,333     29,741     184,725     153,604
                     
    Income taxes     8,703     5,241     33,305     26,870
                     
    Net income   $ 38,630   $ 24,500   $ 151,420   $ 126,734
                     
    Per common share:                
    Net income – basic   $ 2.39   $ 1.52   $ 9.38   $ 7.84
    Net income – diluted   $ 2.37   $ 1.51   $ 9.32   $ 7.80
                     
    Weighted average common shares – basic     16,156,827     16,113,215     16,143,708     16,163,500
    Weighted average common shares – diluted     16,283,701     16,216,562     16,244,797     16,250,019
                     
    Cash dividends declared:                
    Quarterly dividend   $ 1.06   $ 1.05   $ 4.24   $ 4.20
    Special dividend   $ 0.50   $ —   $ 0.50   $ —
                             
       
    PARK NATIONAL CORPORATION   
    Consolidated Balance Sheets  
             
    (in thousands, except share data) December 31, 2024   December 31, 2023  
             
    Assets        
             
    Cash and due from banks $ 122,363     $ 160,477    
    Money market instruments   38,203       57,791    
    Investment securities   1,100,861       1,429,144    
    Loans   7,817,128       7,476,221    
    Allowance for credit losses   (87,966 )     (83,745 )  
    Loans, net   7,729,162       7,392,476    
    Bank premises and equipment, net   69,522       74,211    
    Goodwill and other intangible assets   163,032       164,247    
    Other real estate owned   938       983    
    Other assets   581,269       557,124    
    Total assets $ 9,805,350     $ 9,836,453    
             
    Liabilities and Shareholders’ Equity        
             
    Deposits:        
    Noninterest bearing $ 2,612,708     $ 2,628,234    
    Interest bearing   5,530,818       5,414,332    
    Total deposits   8,143,526       8,042,566    
    Borrowings   280,083       517,329    
    Other liabilities   137,893       131,265    
    Total liabilities $ 8,561,502     $ 8,691,160    
             
             
    Shareholders’ Equity:        
    Preferred shares (200,000 shares authorized; no shares outstanding at December 31, 2024 and December 31, 2023) $ —     $ —    
    Common shares (No par value; 20,000,000 shares authorized; 17,623,104 shares issued at December 31, 2024 and December 31, 2023)   463,706       463,280    
    Total shareholders’ equity $ 1,243,848     $ 1,145,293    
    Total liabilities and shareholders’ equity $ 9,805,350     $ 9,836,453    
     
    PARK NATIONAL CORPORATION 
    Consolidated Average Balance Sheets
               
      Three Months Ended   Twelve Months Ended
      December 31,   December 31,
    (in thousands)   2024     2023       2024     2023  
               
    Assets          
               
    Cash and due from banks $ 122,949   $ 134,593     $ 129,070   $ 147,414  
    Money market instruments   230,591     105,425       157,292     162,544  
    Investment securities    1,167,467     1,544,942       1,265,680     1,716,037  
    Loans   7,757,229     7,387,512       7,627,419     7,222,479  
    Allowance for credit losses   (87,608 )   (85,493 )     (85,930 )   (87,002 )
    Loans, net   7,669,621     7,302,019       7,541,489     7,135,477  
    Bank premises and equipment, net   70,615     76,718       72,689     79,443  
    Goodwill and other intangible assets   163,221     164,466       163,669     164,960  
    Other real estate owned   1,079     1,342       1,192     1,654  
    Other assets   582,785     560,683       570,183     550,025  
    Total assets $ 10,008,328   $ 9,890,188     $ 9,901,264   $ 9,957,554  
               
               
    Liabilities and Shareholders’ Equity          
               
    Deposits:          
    Noninterest bearing $ 2,593,128   $ 2,694,148     $ 2,564,009   $ 2,814,259  
    Interest bearing   5,747,671     5,561,845       5,696,185     5,546,015  
    Total deposits   8,340,799     8,255,993       8,260,194     8,360,274  
    Borrowings   279,149     394,423       309,996     371,955  
    Other liabilities   140,700     136,046       133,954     128,182  
    Total liabilities $ 8,760,648   $ 8,786,462     $ 8,704,144   $ 8,860,411  
               
    Shareholders’ Equity:          
    Preferred shares $ —   $ —     $ —   $ —  
    Common shares   462,146     461,864       461,433     460,973  
    Accumulated other comprehensive loss, net of taxes   (41,229 )   (108,219 )     (60,619 )   (98,154 )
    Retained earnings   978,267     906,091       949,160     884,711  
    Treasury shares   (151,504 )   (156,010 )     (152,854 )   (150,387 )
    Total shareholders’ equity $ 1,247,680   $ 1,103,726     $ 1,197,120   $ 1,097,143  
    Total liabilities and shareholders’ equity $ 10,008,328   $ 9,890,188     $ 9,901,264   $ 9,957,554  
               
     
    PARK NATIONAL CORPORATION 
    Consolidated Statements of Income – Linked Quarters
               
      2024 2024 2024 2024 2023
    (in thousands, except per share data) 4th QTR 3rd QTR 2nd QTR 1st QTR 4th QTR
               
    Interest income:          
    Interest and fees on loans  $ 120,870 $ 120,203 $ 115,318 $ 111,211 $ 108,495
    Interest on debt securities:          
    Taxable   8,641   10,228   10,950   11,899   13,055
    Tax-exempt   1,351   1,381   1,382   1,410   2,248
    Other interest income   2,751   1,996   1,254   2,120   1,408
    Total interest income   133,613   133,808   128,904   126,640   125,206
               
    Interest expense:          
    Interest on deposits:          
    Demand and savings deposits   19,802   22,762   20,370   19,855   19,467
    Time deposits   7,658   7,073   7,525   7,338   6,267
    Interest on borrowings   2,708   2,859   3,172   3,824   4,398
    Total interest expense   30,168   32,694   31,067   31,017   30,132
               
    Net interest income   103,445   101,114   97,837   95,623   95,074
               
    Provision for credit losses   3,935   5,315   3,113   2,180   1,809
               
    Net interest income after provision for credit losses   99,510   95,799   94,724   93,443   93,265
               
    Other income   31,064   36,530   28,794   26,200   15,519
               
    Other expense   83,241   85,681   75,189   77,228   79,043
               
    Income before income taxes   47,333   46,648   48,329   42,415   29,741
               
    Income taxes   8,703   8,431   8,960   7,211   5,241
               
    Net income  $ 38,630 $ 38,217 $ 39,369 $ 35,204 $ 24,500
               
    Per common share:          
    Net income – basic $ 2.39 $ 2.37 $ 2.44 $ 2.18 $ 1.52
    Net income – diluted $ 2.37 $ 2.35 $ 2.42 $ 2.17 $ 1.51
                         
     
    PARK NATIONAL CORPORATION 
    Detail of other income and other expense – Linked Quarters
               
       2024   2024  2024  2024   2023 
    (in thousands) 4th QTR 3rd QTR 2nd QTR 1st QTR 4th QTR
               
    Other income:          
    Income from fiduciary activities $ 11,122   $ 10,615 $ 10,728 $ 10,024   $ 8,943  
    Service charges on deposit accounts   2,319     2,362   2,214   2,106     2,054  
    Other service income   3,277     3,036   2,906   2,524     2,349  
    Debit card fee income   6,511     6,539   6,580   6,243     6,583  
    Bank owned life insurance income   1,519     2,057   1,565   2,629     1,373  
    ATM fees   415     471   458   496     517  
    Pension settlement gain   365     5,783   —   —     —  
    Loss on sale of debt securities, net   (128 )   —   —   (398 )   (7,875 )
    Gain (loss) on equity securities, net   1,852     1,557   358   (687 )   353  
    Other components of net periodic benefit income   2,651     2,204   2,204   2,204     1,893  
    Miscellaneous   1,161     1,906   1,781   1,059     (671 )
    Total other income $ 31,064   $ 36,530 $ 28,794 $ 26,200   $ 15,519  
               
    Other expense:          
    Salaries $ 37,254   $ 38,370 $ 35,954 $ 35,733   $ 36,192  
    Employee benefits   10,129     10,162   9,873   11,560     10,088  
    Occupancy expense   2,929     3,731   2,975   3,181     3,344  
    Furniture and equipment expense   2,375     2,571   2,454   2,583     2,824  
    Data processing fees   10,450     11,764   9,542   8,808     9,605  
    Professional fees and services   10,465     7,842   6,022   6,817     7,015  
    Marketing   1,949     1,464   1,164   1,741     1,716  
    Insurance   1,600     1,640   1,777   1,718     1,708  
    Communication   1,104     955   1,002   1,036     993  
    State tax expense   1,145     1,116   1,129   1,110     1,158  
    Amortization of intangible assets   288     287   320   320     334  
    Foundation contributions   —     2,000   —   —     1,000  
    Miscellaneous   3,553     3,779   2,977   2,621     3,066  
    Total other expense $ 83,241   $ 85,681 $ 75,189 $ 77,228   $ 79,043  
               
     
    PARK NATIONAL CORPORATION 
    Asset Quality Information
                 
        Year ended December 31,
    (in thousands, except ratios)     2024       2023       2022       2021       2020    
                 
    Allowance for credit losses:            
    Allowance for credit losses, beginning of period   $ 83,745     $ 85,379     $ 83,197     $ 85,675     $ 56,679    
    Cumulative change in accounting principle; adoption of ASU 2022-02 in 2023 and ASU 2016-13 in 2021     —       383       —       6,090       —    
    Charge-offs     18,334       10,863       9,133       5,093       10,304    
    Recoveries     8,012       5,942       6,758       8,441       27,246    
    Net charge-offs (recoveries)     10,322       4,921       2,375       (3,348 )     (16,942 )  
    Provision for (recovery of) credit losses     14,543       2,904       4,557       (11,916 )     12,054    
    Allowance for credit losses, end of period   $ 87,966     $ 83,745     $ 85,379     $ 83,197     $ 85,675    
                 
    General reserve trends:            
    Allowance for credit losses, end of period   $ 87,966     $ 83,745     $ 85,379     $ 83,197     $ 85,675    
    Allowance on accruing purchased credit deteriorated (“PCD”) loans (purchased credit impaired (“PCI”) loans for years 2020 and prior)     —       —       —       —       167    
    Allowance on purchased loans excluded from collectively evaluated loans (for years 2020 and prior)     N.A.       N.A.       N.A.       N.A.       678    
    Specific reserves on individually evaluated loans     1,299       4,983       3,566       1,616       5,434    
    General reserves on collectively evaluated loans   $ 86,667     $ 78,762     $ 81,813     $ 81,581     $ 79,396    
                 
    Total loans   $ 7,817,128     $ 7,476,221     $ 7,141,891     $ 6,871,122     $ 7,177,785    
    Accruing PCD loans (PCI loans for years 2020 and prior)     2,174       2,835       4,653       7,149       11,153    
    Purchased loans excluded from collectively evaluated loans (for years 2020 and prior)     N.A.       N.A.       N.A.       N.A.       360,056    
    Individually evaluated loans (k)     53,149       45,215       78,341       74,502       108,407    
    Collectively evaluated loans   $ 7,761,805     $ 7,428,171     $ 7,058,897     $ 6,789,471     $ 6,698,169    
                 
    Asset Quality Ratios:            
    Net charge-offs (recoveries) as a % of average loans     0.14   %   0.07   %   0.03   %   (0.05 ) %   (0.24 ) %
    Allowance for credit losses as a % of period end loans     1.13   %   1.12   %   1.20   %   1.21   %   1.19   %
    General reserve as a % of collectively evaluated loans     1.12   %   1.06   %   1.16   %   1.20   %   1.19   %
                 
    Nonperforming assets:            
    Nonaccrual loans   $ 68,178     $ 60,259     $ 79,696     $ 72,722     $ 117,368    
    Accruing troubled debt restructurings (for years 2022 and prior) (k)     N.A.       N.A.       20,134       28,323       20,788    
    Loans past due 90 days or more     1,754       859       1,281       1,607       1,458    
    Total nonperforming loans   $ 69,932     $ 61,118     $ 101,111     $ 102,652     $ 139,614    
    Other real estate owned     938       983       1,354       775       1,431    
    Other nonperforming assets     —       —       —       2,750       3,164    
    Total nonperforming assets   $ 70,870     $ 62,101     $ 102,465     $ 106,177     $ 144,209    
    Percentage of nonaccrual loans to period end loans     0.87   %   0.81   %   1.12   %   1.06   %   1.64   %
    Percentage of nonperforming loans to period end loans     0.89   %   0.82   %   1.42   %   1.49   %   1.95   %
    Percentage of nonperforming assets to period end loans     0.91   %   0.83   %   1.43   %   1.55   %   2.01   %
    Percentage of nonperforming assets to period end total assets     0.72   %   0.63   %   1.04   %   1.11   %   1.55   %
                 
    Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.
                 
     
    PARK NATIONAL CORPORATION 
    Asset Quality Information (continued)
                 
        Year ended December 31,
    (in thousands, except ratios)    2024  2023  2022  2021  2020
                 
    New nonaccrual loan information:            
    Nonaccrual loans, beginning of period   $ 60,259 $ 79,696 $ 72,722 $ 117,368 $ 90,080
    New nonaccrual loans     65,535   48,280   64,918   38,478   103,386
    Resolved nonaccrual loans     57,616   67,717   57,944   83,124   76,098
    Nonaccrual loans, end of period   $ 68,178 $ 60,259 $ 79,696 $ 72,722 $ 117,368
                 
    Individually evaluated commercial loan portfolio information (period end): (k)
    Unpaid principal balance   $ 58,158 $ 47,564 $ 80,116 $ 75,126 $ 109,062
    Prior charge-offs     5,009   2,349   1,775   624   655
    Remaining principal balance     53,149   45,215   78,341   74,502   108,407
    Specific reserves     1,299   4,983   3,566   1,616   5,434
    Book value, after specific reserves   $ 51,850 $ 40,232 $ 74,775 $ 72,886 $ 102,973
                 
    Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.
     
           
    PARK NATIONAL CORPORATION      
    Financial Reconciliations            
    NON-GAAP RECONCILIATIONS            
      THREE MONTHS ENDED   TWELVE MONTHS ENDED
    (in thousands, except share and per share data) December 31,
    2024    		 September 30,
    2024    		 December 31,
    2023    		   December 31,
    2024    		 December 31,
    2023
    Net interest income $ 103,445     $ 101,114     $ 95,074       $ 398,019     $ 373,113    
    less purchase accounting accretion related to NewDominion and Carolina Alliance acquisitions   250       281       124         1,154       633    
    less interest income on former Vision Bank relationships   38       9       35         54       631    
    Net interest income – adjusted $ 103,157     $ 100,824     $ 94,915       $ 396,811     $ 371,849    
                 
    Provision for credit losses $ 3,935     $ 5,315     $ 1,809       $ 14,543     $ 2,904    
    less recoveries on former Vision Bank relationships   —       (234 )     —         (1,304 )     (788 )  
    Provision for credit losses – adjusted $ 3,935     $ 5,549     $ 1,809       $ 15,847     $ 3,692    
                 
    Other income $ 31,064     $ 36,530     $ 15,519       $ 122,588     $ 92,634    
    less loss on sale of debt securities, net   (128 )     —       (7,875 )       (526 )     (7,875 )  
    less pension settlement gain   365       5,783       —         6,148       —    
    less impact of strategic initiatives   117       —       (1,038 )       775       (1,038 )  
    less Vision related OREO valuation adjustments, net   —       1       (370 )       115       (370 )  
    less other service income related to former Vision Bank relationships   299       —       40         312       175    
    Other income – adjusted $ 30,411     $ 30,746     $ 24,762       $ 115,764     $ 101,742    
                 
    Other expense $ 83,241     $ 85,681     $ 79,043       $ 321,339     $ 309,239    
    less core deposit intangible amortization related to NewDominion and Carolina Alliance acquisitions   288       287       334         1,215       1,323    
    less Foundation contribution   —       2,000       1,000         2,000       1,000    
    less special incentive   —       1,700       —         1,700       —    
    less building demolition costs   44       349       —         458       —    
    less direct expenses related to collection of payments on former Vision Bank loan relationships   215       —       —         215       100    
    Other expense – adjusted $ 82,694     $ 81,345     $ 77,709       $ 315,751     $ 306,816    
                 
    Tax effect of adjustments to net income identified above (i) $ (83 )   $ (414 )   $ 2,188       $ (787 )   $ 1,991    
                 
    Net income – reported $ 38,630     $ 38,217     $ 24,500       $ 151,420     $ 126,734    
    Net income – adjusted (h) $ 38,319     $ 36,659     $ 32,730       $ 148,459     $ 134,222    
                 
    Diluted earnings per common share $ 2.37     $ 2.35     $ 1.51       $ 9.32     $ 7.80    
    Diluted earnings per common share, adjusted (h) $ 2.35     $ 2.25     $ 2.02       $ 9.14     $ 8.26    
                 
    Annualized return on average assets (a)(b)   1.54   %   1.53   %   0.98   %     1.53   %   1.27   %
    Annualized return on average assets, adjusted (a)(b)(h)   1.52   %   1.47   %   1.31   %     1.50   %   1.35   %
                 
    Annualized return on average tangible assets (a)(b)(e)   1.56   %   1.56   %   1.00   %     1.56   %   1.29   %
    Annualized return on average tangible assets, adjusted (a)(b)(e)(h)   1.55   %   1.49   %   1.34   %     1.52   %   1.37   %
                 
    Annualized return on average shareholders’ equity (a)(b)   12.32   %   12.56   %   8.81   %     12.65   %   11.55   %
    Annualized return on average shareholders’ equity, adjusted (a)(b)(h)   12.22   %   12.05   %   11.76   %     12.40   %   12.23   %
                 
    Annualized return on average tangible equity (a)(b)(c)   14.17   %   14.52   %   10.35   %     14.65   %   13.60   %
    Annualized return on average tangible equity, adjusted (a)(b)(c)(h)   14.06   %   13.93   %   13.83   %     14.37   %   14.40   %
                 
    Efficiency ratio (g)   61.60   %   61.98   %   70.93   %     61.44   %   65.87   %
    Efficiency ratio, adjusted (g)(h)   61.63   %   61.55   %   64.48   %     61.31   %   64.28   %
                 
    Annualized net interest margin (g)   4.51   %   4.45   %   4.17   %     4.41   %   4.11   %
    Annualized net interest margin, adjusted (g)(h)   4.50   %   4.43   %   4.17   %     4.39   %   4.09   %
    Note: Explanations for footnotes (a) – (k) are included at the end of the financial tables in the “Financial Reconciliations” section.  
         
           
    PARK NATIONAL CORPORATION      
    Financial Reconciliations (continued)            
                 
    (a) Reported measure uses net income
    (b) Averages are for the three months ended December 31, 2024, September 30, 2024, and December 31, 2023 and the twelve months ended December 31, 2024 and December 31, 2023, as appropriate
    (c) Net income for each period divided by average tangible equity during the period. Average tangible equity equals average shareholders’ equity during the applicable period less average goodwill and other intangible assets during the applicable period.
                 
    RECONCILIATION OF AVERAGE SHAREHOLDERS’ EQUITY TO AVERAGE TANGIBLE EQUITY:      
      THREE MONTHS ENDED   TWELVE MONTHS ENDED
      December 31, 2024 September 30, 2024 December 31, 2023   December 31, 2024 December 31, 2023
    AVERAGE SHAREHOLDERS’ EQUITY $ 1,247,680 $ 1,210,565 $ 1,103,726   $ 1,197,120 $ 1,097,143
    Less: Average goodwill and other intangible assets   163,221   163,509   164,466     163,669   164,960
    AVERAGE TANGIBLE EQUITY $ 1,084,459 $ 1,047,056 $ 939,260   $ 1,033,451 $ 932,183
                 
    (d) Tangible equity divided by common shares outstanding at period end. Tangible equity equals total shareholders’ equity less goodwill and other intangible assets, in each case at the end of the period.
                 
    RECONCILIATION OF TOTAL SHAREHOLDERS’ EQUITY TO TANGIBLE EQUITY:
      December 31, 2024 September 30, 2024 December 31, 2023      
    TOTAL SHAREHOLDERS’ EQUITY $ 1,243,848 $ 1,239,413 $ 1,145,293      
    Less: Goodwill and other intangible assets   163,032   163,320   164,247      
    TANGIBLE EQUITY $ 1,080,816 $ 1,076,093 $ 981,046      
                 
    (e) Net income for each period divided by average tangible assets during the period. Average tangible assets equal average assets less average goodwill and other intangible assets, in each case during the applicable period.
                 
    RECONCILIATION OF AVERAGE ASSETS TO AVERAGE TANGIBLE ASSETS      
      THREE MONTHS ENDED   TWELVE MONTHS ENDED
      December 31, 2024 September 30, 2024 December 31, 2023   December 31, 2024 December 31, 2023
    AVERAGE ASSETS $ 10,008,328 $ 9,920,633 $ 9,890,188   $ 9,901,264 $ 9,957,554
    Less: Average goodwill and other intangible assets   163,221   163,509   164,466     163,669   164,960
    AVERAGE TANGIBLE ASSETS $ 9,845,107 $ 9,757,124 $ 9,725,722   $ 9,737,595 $ 9,792,594
                 
    (f) Tangible equity divided by tangible assets. Tangible assets equal total assets less goodwill and other intangible assets, in each case at the end of the period.
                 
    RECONCILIATION OF TOTAL ASSETS TO TANGIBLE ASSETS:
      December 31, 2024 September 30, 2024 December 31, 2023      
    TOTAL ASSETS $ 9,805,350 $ 9,903,049 $ 9,836,453      
    Less: Goodwill and other intangible assets   163,032   163,320   164,247      
    TANGIBLE ASSETS $ 9,642,318 $ 9,739,729 $ 9,672,206      
                 
    (g) Efficiency ratio is calculated by dividing total other expense by the sum of fully taxable equivalent net interest income and other income. Fully taxable equivalent net interest income reconciliation is shown assuming a 21% corporate federal income tax rate. Additionally, net interest margin is calculated on a fully taxable equivalent basis by dividing fully taxable equivalent net interest income by average interest earning assets, in each case during the applicable period.
                 
    RECONCILIATION OF FULLY TAXABLE EQUIVALENT NET INTEREST INCOME TO NET INTEREST INCOME
      THREE MONTHS ENDED   TWELVE MONTHS ENDED
      December 31, 2024 September 30, 2024 December 31, 2023   December 31, 2024 December 31, 2023
    Interest income $ 133,613 $ 133,808 $ 125,206   $ 522,965 $ 471,670
    Fully taxable equivalent adjustment   617   594   838     2,432   3,726
    Fully taxable equivalent interest income $ 134,230 $ 134,402 $ 126,044   $ 525,397 $ 475,396
    Interest expense   30,168   32,694   30,132     124,946   98,557
    Fully taxable equivalent net interest income $ 104,062 $ 101,708 $ 95,912   $ 400,451 $ 376,839
                 
    (h) Adjustments to net income for each period presented are detailed in the non-GAAP reconciliations of net interest income, provision for credit losses, other income, other expense and tax effect of adjustments to net income.
    (i) The tax effect of adjustments to net income was calculated assuming a 21% corporate federal income tax rate.
    (j) Pre-tax, pre-provision (“PTPP”) net income is calculated as net income, plus income taxes, plus the provision for credit losses, in each case during the applicable period. PTPP net income is a common industry metric utilized in capital analysis and review. PTPP is used to assess the operating performance of Park while excluding the impact of the provision for credit losses.
                 
     
    RECONCILIATION OF PRE-TAX, PRE-PROVISION NET INCOME
      THREE MONTHS ENDED   TWELVE MONTHS ENDED
      December 31, 2024 September 30, 2024 December 31, 2023   December 31, 2024 December 31, 2023
    Net income $ 38,630 $ 38,217 $ 24,500   $ 151,420 $ 126,734
    Plus: Income taxes   8,703   8,431   5,241     33,305   26,870
    Plus: Provision for credit losses   3,935   5,315   1,809     14,543   2,904
    Pre-tax, pre-provision net income $ 51,268 $ 51,963 $ 31,550   $ 199,268 $ 156,508
                 
    (k) Effective January 1, 2023, Park adopted Accounting Standards Update (“ASU”) 2022-02. Among other things, this ASU eliminated the concept of troubled debt restructurings (“TDRs”). As a result of the adoption of this ASU and elimination of the concept of TDRs, total nonperforming loans (“NPLs”) and total nonperforming assets (“NPAs”) each decreased by $20.1 million effective January 1, 2023. Additionally, as a result of the adoption of this ASU, individually evaluated loans decreased by $11.5 million effective January 1, 2023.
     

    The MIL Network –

  • MIL-OSI: NBT Bancorp Inc. Announces Full Year Net Income and Declares Cash Dividend

    Source: GlobeNewswire (MIL-OSI)

    NORWICH, N.Y., Jan. 27, 2025 (GLOBE NEWSWIRE) — NBT Bancorp Inc. (“NBT” or the “Company”) (NASDAQ: NBTB) reported net income and diluted earnings per share for the three and twelve months ended December 31, 2024.

    Net income for the three months ended December 31, 2024 was $36.0 million, or $0.76 per diluted common share, compared to $30.4 million, or $0.64 per diluted common share, for the three months ended December 31, 2023, and $38.1 million, or $0.80 per diluted common share, for the third quarter of 2024. Operating diluted earnings per share(1), a non-GAAP measure was $0.77 for the fourth quarter of 2024, compared to $0.72 for the fourth quarter of 2023 and $0.80 for the third quarter of 2024.

    Net income for the year ended December 31, 2024 was $140.6 million, or $2.97 per diluted common share, compared to $118.8 million, or $2.65 per diluted common share, in the prior year.

    The Company completed the acquisition of Salisbury Bancorp, Inc. (“Salisbury”) on August 11, 2023, adding 13 banking offices, $1.18 billion in loans and $1.31 billion in deposits. The comparisons to the full year of 2023 are significantly impacted by the Salisbury acquisition.

    CEO Comments

    “Three consecutive quarters of growth in net interest income and margin along with continued strong results from our diverse mix of fee businesses drove NBT’s operating performance in the fourth quarter of 2024,” said NBT President and Chief Executive Officer Scott A. Kingsley. “In addition, we were pleased to receive regulatory approval during the fourth quarter to complete our planned merger with Evans Bancorp, Inc. Evans shareholders also demonstrated strong support for the partnership with the vote to approve the transaction in December. We continue to expect the merger to close in the second quarter of 2025 in conjunction with the core system conversion, and team members from NBT and Evans are working closely to plan a smooth transition for the customers and communities we will serve together in the Buffalo and Rochester markets.”

    Fourth Quarter 2024 Financial Highlights

    Net Income
    • Net income was $36.0 million and diluted earnings per share was $0.76
    Net Interest Income / NIM
    • Net interest income on a fully taxable equivalent (“FTE”) basis was $106.7 million, up $4.4 million from the prior quarter(1)
    • Net interest margin (“NIM”) on an FTE basis was 3.34%(1), up 7 basis points (“bps”) from the prior quarter
    • Included in FTE net interest income was $2.6 million of acquisition-related net accretion, which was consistent with the third quarter of 2024
    • Earning asset yields of 4.96% were down 5 bps from the prior quarter
    • Total cost of funds of 1.71% was down 14 bps from the prior quarter
    Noninterest Income
    • Noninterest income was $42.2 million, an increase of 11.1% from the fourth quarter of 2023, excluding net securities gains (losses)
    Loans and Credit Quality
    • Period end total loans of $9.97 billion as of December 31, 2024, up $319.2 million, or 3.3%, from December 31, 2023
    • Net charge-offs to average loans was 0.23% annualized
    • Nonperforming loans to total loans was 0.52%
    • Allowance for loan losses to total loans was 1.16%
    Deposits
    • Deposits were $11.55 billion as of December 31, 2024, up $577.8 million, or 5.3%, from December 31, 2023
    • Total cost of deposits was 1.60% for the fourth quarter of 2024, down 12 bps from the third quarter of 2024
    Capital
    • Stockholders’ equity was $1.53 billion as of December 31, 2024
    • Tangible book value per share(2) was $23.88 at December 31, 2024
    • Tangible equity to assets of 8.42%(1)
    • CET1 ratio of 11.93%; Leverage ratio of 10.24%


    Loans

    • Period end total loans were $9.97 billion at December 31, 2024, $9.91 billion at September 30, 2024 and $9.65 billion at December 31, 2023.
    • Period end total loans increased $319.2 million from December 31, 2023. Total commercial loans increased $322.0 million to $5.30 billion while total consumer loans decreased $2.8 million to $4.67 billion. Excluding the other consumer and residential solar portfolios, which are in a planned run-off status, period end loans increased $478.6 million, or 5.6%.
    • Commercial line of credit utilization rate was 21% at December 31, 2024, compared to 22% at September 30, 2024 and 20% at December 31, 2023.

    Deposits

    • Total deposits at December 31, 2024 were $11.55 billion, compared to $11.59 billion at September 30, 2024 and $10.97 billion at December 31, 2023. The $577.8 million increase in deposits from December 31, 2023 was primarily due to higher consumer and commercial deposit balances.
    • The loan to deposit ratio was 86.3% at December 31, 2024, compared to 88.0% at December 31, 2023.

    Net Interest Income and Net Interest Margin

    • Net interest income for the fourth quarter of 2024 was $106.1 million, an increase of $4.4 million, or 4.4%, from the third quarter of 2024 and an increase of $6.9 million, or 7.0%, from the fourth quarter of 2023. The increase in net interest income from the third quarter of 2024 resulted primarily from a decrease in the cost of deposits, an increase in average short-term interest-bearing accounts and the interest earned on those balances combined with a more favorable funding mix.
    • The NIM on an FTE basis for the fourth quarter of 2024 was 3.34%, an increase of 7 bps from the third quarter of 2024. This increase was driven by an improved funding mix with lower average balances of short-term borrowings, an increase in the average balance of noninterest-bearing demand deposit accounts and a decrease in the cost of interest-bearing deposits. The NIM on an FTE basis increased 19 bps from the fourth quarter of 2023 due to higher earning asset yields and lower average balances of short-term borrowings, partially offset by the increase in the cost of interest-bearing deposits.
    • Earning asset yields for the three months ended December 31, 2024 decreased 5 bps from the prior quarter to 4.96% and increased 17 bps from the same quarter in the prior year. Loan yields for the three months ended December 31, 2024 decreased 9 bps from the prior quarter to 5.65% primarily due to the repricing of $2.1 billion in variable rate loans partly offset by loans originating at higher rates than portfolio yields during the quarter. Earnings asset yields increased 17 bps from the same quarter in the prior year. Average earning assets increased $257.5 million, or 2.1%, from the third quarter of 2024 due to organic loan growth and an increase in short-term interest-bearing accounts. Average earning assets grew $140.6 million, or 1.1%, from the fourth quarter of 2023 due to organic loan growth partially offset by lower average balances of short-term interest-bearing accounts and securities.
    • Total cost of deposits, including noninterest bearing deposits, was 1.60% for the fourth quarter of 2024, a decrease of 12 bps from the prior quarter and an increase of 9 bps from the same period in the prior year.
    • Total cost of funds for the three months ended December 31, 2024 was 1.71%, a decrease of 14 bps from the prior quarter and a decrease of 1 bp from the fourth quarter of 2023.

    Asset Quality and Allowance for Loan Losses

    • Net charge-offs to total average loans for the fourth quarter of 2024 was 23 bps compared to 16 bps in the prior quarter. The increase in net charge-offs from the prior quarter was driven by two commercial real estate relationships, of which $1.7 million was previously specifically reserved for in the second quarter of 2024. Net charge-offs for the portfolios in a planned run-off status represented the majority of total net charge-offs for the full year.
    • Nonperforming assets to total assets was 0.38% at December 31, 2024, compared to 0.27% at September 30, 2024 and 0.28% at December 31, 2023. The increase in nonperforming assets was attributable to a commercial real estate relationship that was placed into a nonaccrual status in the fourth quarter of 2024. The relationship is being actively managed and was written-down to estimated fair value in the fourth quarter of 2024, and as such, no specific reserve has been established.
    • Provision expense for the three months ended December 31, 2024 was $2.2 million, compared to $2.9 million for the third quarter of 2024. The decrease in provision expense from the prior quarter was primarily due to the run-off of the other consumer and residential solar portfolios partially offset by a higher level of net charge-offs.
    • The allowance for loan losses was $116.0 million, or 1.16% of total loans, at December 31, 2024, compared to $119.5 million, or 1.21% of total loans, at September 30, 2024 and $114.4 million, or 1.19% of total loans, at December 31, 2023.
    • The reserve for unfunded loan commitments was $4.4 million at December 31, 2024, compared to $4.6 million at September 30, 2024 and $5.1 million at December 31, 2023.

    Noninterest Income

    • Total noninterest income, excluding securities gains (losses), was $42.2 million for the three months ended December 31, 2024, down $3.1 million, or 6.8%, from the seasonally high third quarter of 2024, and up $4.2 million, or 11.1%, from the fourth quarter of 2023.
    • Retirement plan administration fees were down $1.7 million from the prior quarter and increased $1.7 million from the fourth quarter of 2023. The decrease from the prior quarter, as expected, was due to higher seasonal activity-based fees in the third quarter. The increase from the fourth quarter of 2023 was driven by organic growth and higher market levels.
    • Wealth management fees were consistent with the prior quarter and increased $1.7 million from the fourth quarter of 2023. The increase from the fourth quarter of 2023 was driven by market performance and growth in new customer accounts.
    • Insurance revenues decreased $1.0 million from the third quarter, which typically has comparatively higher levels of policy renewals than the fourth quarter.

    Noninterest Expense

    • Total noninterest expense was $100.8 million for the fourth quarter of 2024, compared to $95.7 million for the third quarter of 2024 and $92.8 million for the fourth quarter of 2023. Total noninterest expense increased 4.8% compared to the previous quarter and increased 13.7% from the fourth quarter of 2023, excluding $1.0 million of acquisition expenses in the fourth quarter of 2024, $0.5 million in the third quarter of 2024 and $0.3 million in the fourth quarter of 2023, respectively, and the $4.8 million impairment of a minority interest equity investment in the fourth quarter of 2023.
    • Salaries and benefits increased 3.5% from the prior quarter driven by higher medical costs and an increase in other benefits including higher levels of incentive compensation. The increase from the fourth quarter of 2023 was driven by merit pay increases, higher levels of incentive compensation and higher medical and other benefit costs.
    • Occupancy costs were consistent with the prior quarter and increased from the fourth quarter of 2023 driven by additional expenses including seasonal maintenance, rent and equipment expense.
    • Other expense increased $2.5 million from the prior quarter and $0.4 million from the fourth quarter of 2023. The increase from the previous quarter was driven by increases in office supplies and postage, advertising and other expenses.

    Income Taxes

    • The full year effective tax rate was 21.6% for 2024 down from 22.6% for the full year of 2023.

    Capital

    • Tangible common equity to tangible assets(1) was 8.42% at December 31, 2024. Tangible book value per share(2) was $23.88 at December 31, 2024, $23.83 at September 30, 2024 and $21.72 at December 31, 2023.
    • Stockholders’ equity increased $100.5 million from December 31, 2023 driven by net income generation of $140.6 million and an $18.8 million decrease in accumulated other comprehensive loss reflecting the change in the fair value of securities available for sale, partially offset by dividends declared of $62.3 million.
    • As of December 31, 2024, CET1 capital ratio of 11.93%, leverage ratio of 10.24% and total risk-based capital ratio of 15.03%.

    Dividend

    • The Board of Directors approved a first-quarter cash dividend of $0.34 per share at a meeting held earlier today. The dividend represents a $0.02 per share, or 6.3%, increase over the dividend paid in the first quarter of 2024. The dividend will be paid on March 17, 2025 to stockholders of record as of March 3, 2025.

    Stock Repurchase

    • The Company purchased 7,600 shares of its common stock during 2024 at an average price of $33.02 per share under its previously announced share repurchase program. The Company may repurchase shares of its common stock from time to time to mitigate the potential dilutive effects of stock-based incentive plans and other potential uses of common stock for corporate purposes. As of December 31, 2024, there were 1,992,400 shares available for repurchase under this plan.

    Evans Bancorp, Inc. Merger

    • In December 2024, NBT announced that it had received the regulatory approval and waiver from the Office of the Comptroller of the Currency and the Federal Reserve Bank of New York necessary to complete its acquisition of Evans Bancorp, Inc. (“Evans”). Also in December 2024, the shareholders of Evans voted to approve the merger. Evans reported over 75% of the issued and outstanding shares of Evans were represented at a special shareholder meeting and over 96% of the votes cast were voted to approve the merger. NBT and Evans anticipate closing the transaction in second quarter of 2025 in conjunction with the core system conversion, pending customary closing conditions. Evans had assets of $2.28 billion, deposits of $1.90 billion and net loans of $1.76 billion as of September 30, 2024.

    Conference Call and Webcast

    The Company will host a conference call at 10:00 a.m. (Eastern) Tuesday, January 28, 2025, to review the fourth quarter 2024 financial results. The audio webcast link, along with the corresponding presentation slides, will be available on the Company’s Event Calendar page at www.nbtbancorp.com/bn/presentations-events.html#events and will be archived for twelve months.

    Corporate Overview

    NBT Bancorp Inc. is a financial holding company headquartered in Norwich, NY, with total assets of $13.79 billion at December 31, 2024. The Company primarily operates through NBT Bank, N.A., a full-service community bank, and through two financial services companies. NBT Bank, N.A. has 155 banking locations in New York, Pennsylvania, Vermont, Massachusetts, New Hampshire, Maine and Connecticut. EPIC Retirement Plan Services, based in Rochester, NY, is a national benefits administration firm. NBT Insurance Agency, LLC, based in Norwich, NY, is a full-service insurance agency. More information about NBT and its divisions is available online at: www.nbtbancorp.com, www.nbtbank.com, www.epicrps.com and www.nbtbank.com/Insurance.

    Forward-Looking Statements

    This press release contains forward-looking statements, as defined in the Private Securities Litigation Reform Act of 1995. These statements may be identified by the use of phrases such as “anticipate,” “believe,” “expect,” “forecasts,” “projects,” “will,” “can,” “would,” “should,” “could,” “may,” or other similar terms. There are a number of factors, many of which are beyond the Company’s control, that could cause actual results to differ materially from those contemplated by the forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by such forward-looking statements include, among others, the following possibilities: (1) local, regional, national and international economic conditions, including actual or potential stress in the banking industry, and the impact they may have on the Company and its customers, and the Company’s assessment of that impact; (2) changes in the level of nonperforming assets and charge-offs; (3) changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; (4) the effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board (“FRB”); (5) inflation, interest rate, securities market and monetary fluctuations; (6) political instability; (7) acts of war, including international military conflicts, or terrorism; (8) the timely development and acceptance of new products and services and the perceived overall value of these products and services by users; (9) changes in consumer spending, borrowing and saving habits; (10) changes in the financial performance and/or condition of the Company’s borrowers; (11) technological changes; (12) acquisition and integration of acquired businesses; (13) the possibility that NBT and Evans may be unable to achieve expected synergies and operating efficiencies in the merger within the expected timeframes or at all or to successfully integrate Evans operations and those of NBT; (14) the ability to increase market share and control expenses; (15) changes in the competitive environment among financial holding companies; (16) the effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which the Company and its subsidiaries must comply, including those under the Dodd-Frank Act, and the Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018; (17) the effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the Public Company Accounting Oversight Board, the Financial Accounting Standards Board and other accounting standard setters; (18) changes in the Company’s organization, compensation and benefit plans; (19) the costs and effects of legal and regulatory developments, including the resolution of legal proceedings or regulatory or other governmental inquiries, and the results of regulatory examinations or reviews; (20) greater than expected costs or difficulties related to the integration of new products and lines of business; and (21) the Company’s success at managing the risks involved in the foregoing items.

    The Company cautions readers not to place undue reliance on any forward-looking statements, which speak only as of the date made, and advises readers that various factors, including, but not limited to, those described above and other factors discussed in the Company’s annual and quarterly reports previously filed with the SEC, could affect the Company’s financial performance and could cause the Company’s actual results or circumstances for future periods to differ materially from those anticipated or projected.

    Unless required by law, the Company does not undertake, and specifically disclaims any obligations to, publicly release any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements.

    Non-GAAP Measures

    This press release contains financial information determined by methods other than in accordance with U.S. generally accepted accounting principles (“GAAP”). Where non-GAAP disclosures are used in this press release, the comparable GAAP measure, as well as a reconciliation to the comparable GAAP measure, is provided in the accompanying tables. Management believes that these non-GAAP measures provide useful information that is important to an understanding of the results of the Company’s core business as well as provide information standard in the financial institution industry. Non-GAAP measures should not be considered a substitute for financial measures determined in accordance with GAAP and investors should consider the Company’s performance and financial condition as reported under GAAP and all other relevant information when assessing the performance or financial condition of the Company. Amounts previously reported in the consolidated financial statements are reclassified whenever necessary to conform to current period presentation.

    NBT Bancorp Inc. and Subsidiaries            
    Selected Financial Data            
    (unaudited, dollars in thousands except per share data)          
                 
        2024     2023    
      4th Q 3rd Q 2nd Q 1st Q 4th Q  
    Profitability (reported)            
    Diluted earnings per share $ 0.76   $ 0.80   $ 0.69   $ 0.71   $ 0.64    
    Weighted average diluted common shares outstanding   47,505,760     47,473,417     47,382,814     47,370,145     47,356,899    
    Return on average assets(3)   1.04 %   1.12 %   0.98 %   1.02 %   0.89 %  
    Return on average equity(3)   9.44 %   10.21 %   9.12 %   9.52 %   8.79 %  
    Return on average tangible common equity(1)(3)   13.36 %   14.54 %   13.23 %   13.87 %   13.08 %  
    Net interest margin(1)(3)   3.34 %   3.27 %   3.18 %   3.14 %   3.15 %  
                 
      12 Months Ended December 31,        
        2024     2023          
    Profitability (reported)            
    Diluted earnings per share $ 2.97   $ 2.65          
    Weighted average diluted common shares outstanding   47,433,174     44,770,171          
    Return on average assets   1.04 %   0.95 %        
    Return on average equity   9.57 %   9.34 %        
    Return on average tangible common equity(1)   13.75 %   13.02 %        
    Net interest margin(1)   3.23 %   3.29 %        
                 
        2024     2023    
      4th Q 3rd Q 2nd Q 1st Q 4th Q  
    Profitability (operating)            
    Diluted earnings per share(1) $ 0.77   $ 0.80   $ 0.69   $ 0.68   $ 0.72    
    Return on average assets(1)(3)   1.06 %   1.12 %   0.98 %   0.97 %   0.99 %  
    Return on average equity(1)(3)   9.60 %   10.23 %   9.14 %   9.04 %   9.79 %  
    Return on average tangible common equity(1)(3)   13.57 %   14.56 %   13.26 %   13.20 %   14.49 %  
                 
        2024     2023    
      4th Q 3rd Q 2nd Q 1st Q 4th Q  
    Balance sheet data            
    Short-term interest-bearing accounts $ 78,973   $ 231,671   $ 35,207   $ 156,632   $ 31,378    
    Securities available for sale   1,574,664     1,509,338     1,439,445     1,418,471     1,430,858    
    Securities held to maturity   842,921     854,941     878,909     890,863     905,267    
    Net loans   9,853,910     9,787,541     9,733,847     9,572,777     9,536,313    
    Total assets   13,786,666     13,839,552     13,501,909     13,439,199     13,309,040    
    Total deposits   11,546,761     11,588,278     11,271,459     11,195,289     10,968,994    
    Total borrowings   414,983     456,666     476,082     518,190     637,387    
    Total liabilities   12,260,525     12,317,572     12,039,954     11,997,784     11,883,349    
    Stockholders’ equity   1,526,141     1,521,980     1,461,955     1,441,415     1,425,691    
                 
    Capital            
    Equity to assets   11.07 %   11.00 %   10.83 %   10.73 %   10.71 %  
    Tangible equity ratio(1)   8.42 %   8.36 %   8.11 %   7.98 %   7.93 %  
    Book value per share $ 32.34   $ 32.26   $ 31.00   $ 30.57   $ 30.26    
    Tangible book value per share(2) $ 23.88   $ 23.83   $ 22.54   $ 22.07   $ 21.72    
    Leverage ratio   10.24 %   10.29 %   10.16 %   10.09 %   9.71 %  
    Common equity tier 1 capital ratio   11.93 %   11.86 %   11.70 %   11.68 %   11.57 %  
    Tier 1 capital ratio   12.83 %   12.77 %   12.61 %   12.61 %   12.50 %  
    Total risk-based capital ratio   15.03 %   15.02 %   14.88 %   14.87 %   14.75 %  
    Common stock price (end of period) $ 47.76   $ 44.23   $ 38.60   $ 36.68   $ 41.91    
    NBT Bancorp Inc. and Subsidiaries          
    Asset Quality and Consolidated Loan Balances          
    (unaudited, dollars in thousands)          
               
        2024     2023  
      4th Q 3rd Q 2nd Q 1st Q 4th Q
    Asset quality          
    Nonaccrual loans $ 45,819   $ 33,338   $ 34,755   $ 35,189   $ 34,213  
    90 days past due and still accruing   5,798     3,981     3,333     2,600     3,661  
    Total nonperforming loans   51,617     37,319     38,088     37,789     37,874  
    Other real estate owned   182     127     74     –     –  
    Total nonperforming assets   51,799     37,446     38,162     37,789     37,874  
    Allowance for loan losses   116,000     119,500     120,500     115,300     114,400  
               
    Asset quality ratios          
    Allowance for loan losses to total loans   1.16 %   1.21 %   1.22 %   1.19 %   1.19 %
    Total nonperforming loans to total loans   0.52 %   0.38 %   0.39 %   0.39 %   0.39 %
    Total nonperforming assets to total assets   0.38 %   0.27 %   0.28 %   0.28 %   0.28 %
    Allowance for loan losses to total nonperforming loans   224.73 %   320.21 %   316.37 %   305.12 %   302.05 %
    Past due loans to total loans(4)   0.34 %   0.36 %   0.30 %   0.33 %   0.32 %
    Net charge-offs to average loans(3)   0.23 %   0.16 %   0.15 %   0.19 %   0.22 %
               
        2024     2023  
      4th Q 3rd Q 2nd Q 1st Q 4th Q
    Loan net charge-offs by line of business          
    Commercial $ 2,542   $ 807   $ (8 ) $ 772   $ 1,107  
    Residential real estate and home equity   (25 )   (64 )   (76 )   (32 )   11  
    Indirect auto   675     725     747     665     399  
    Residential solar   1,589     1,599     1,610     1,211     1,081  
    Other consumer   928     853     1,426     2,063     2,729  
      Total loan net charge-offs $ 5,709   $ 3,920   $ 3,699   $ 4,679   $ 5,327  
               
        2024     2023  
      4th Q 3rd Q 2nd Q 1st Q 4th Q
    Allowance for loan losses as a percentage of loans by segment        
    Commercial & industrial   0.73 %   0.73 %   0.76 %   0.79 %   0.84 %
    Commercial real estate   0.95 %   1.01 %   1.00 %   0.97 %   0.99 %
    Residential real estate   1.00 %   1.00 %   0.98 %   0.89 %   0.84 %
    Auto   0.81 %   0.83 %   0.85 %   0.81 %   0.83 %
    Residential solar   3.70 %   3.70 %   3.76 %   3.58 %   3.28 %
    Other consumer   2.65 %   3.51 %   4.09 %   4.24 %   4.70 %
      Total   1.16 %   1.21 %   1.22 %   1.19 %   1.19 %
               
        2024     2023  
      4th Q 3rd Q 2nd Q 1st Q 4th Q
    Loans by line of business          
    Commercial & industrial $ 1,426,482   $ 1,458,926   $ 1,397,935   $ 1,353,446   $ 1,354,248  
    Commercial real estate   3,876,698     3,792,498     3,784,214     3,646,739     3,626,910  
    Residential real estate   2,142,249     2,143,766     2,134,875     2,133,289     2,125,804  
    Home equity   334,268     328,687     326,556     328,673     337,214  
    Indirect auto   1,273,253     1,235,175     1,225,786     1,190,734     1,130,132  
    Residential solar   820,079     839,659     861,883     896,147     917,755  
    Other consumer   96,881     108,330     123,098     139,049     158,650  
      Total loans $ 9,969,910   $ 9,907,041   $ 9,854,347   $ 9,688,077   $ 9,650,713  
    NBT Bancorp Inc. and Subsidiaries      
    Consolidated Balance Sheets      
    (unaudited, in thousands)      
           
      December 31, December 31,  
      2024 2023  
    Assets      
    Cash and due from banks $ 205,083 $ 173,811  
    Short-term interest-bearing accounts   78,973   31,378  
    Equity securities, at fair value   42,372   37,591  
    Securities available for sale, at fair value   1,574,664   1,430,858  
    Securities held to maturity (fair value $749,945 and $814,524, respectively)   842,921   905,267  
    Federal Reserve and Federal Home Loan Bank stock   33,957   45,861  
    Loans held for sale   9,744   3,371  
    Loans   9,969,910   9,650,713  
    Less allowance for loan losses   116,000   114,400  
      Net loans $ 9,853,910 $ 9,536,313  
    Premises and equipment, net   80,840   80,675  
    Goodwill   362,663   361,851  
    Intangible assets, net   36,360   40,443  
    Bank owned life insurance   272,657   265,732  
    Other assets   392,522   395,889  
    Total assets $ 13,786,666 $ 13,309,040  
           
    Liabilities and stockholders’ equity      
    Demand (noninterest bearing) $ 3,446,068 $ 3,413,829  
    Savings, NOW and money market   6,658,188   6,230,456  
    Time   1,442,505   1,324,709  
      Total deposits $ 11,546,761 $ 10,968,994  
    Short-term borrowings   162,942   386,651  
    Long-term debt   29,644   29,796  
    Subordinated debt, net   121,201   119,744  
    Junior subordinated debt   101,196   101,196  
    Other liabilities   298,781   276,968  
      Total liabilities $ 12,260,525 $ 11,883,349  
           
    Total stockholders’ equity $ 1,526,141 $ 1,425,691  
           
    Total liabilities and stockholders’ equity $ 13,786,666 $ 13,309,040  
    NBT Bancorp Inc. and Subsidiaries          
    Consolidated Statements of Income          
    (unaudited, in thousands except per share data)          
               
      Three Months Ended Twelve Months Ended  
      December 31, December 31,  
      2024 2023 2024 2023  
    Interest, fee and dividend income          
    Interest and fees on loans $ 141,103   $ 132,738 $ 552,846   $ 462,669    
    Securities available for sale   8,773     7,208   31,274     29,812    
    Securities held to maturity   4,931     5,374   20,466     20,681    
    Other   2,930     5,594   7,084     9,627    
      Total interest, fee and dividend income $ 157,737   $ 150,914 $ 611,670   $ 522,789    
    Interest expense          
    Deposits $ 46,815   $ 42,753 $ 186,948   $ 104,641    
    Short-term borrowings   918     4,951   8,669     25,608    
    Long-term debt   293     294   1,166     925    
    Subordinated debt   1,816     1,795   7,232     6,076    
    Junior subordinated debt   1,790     1,948   7,533     7,320    
      Total interest expense $ 51,632   $ 51,741 $ 211,548   $ 144,570    
    Net interest income $ 106,105   $ 99,173 $ 400,122   $ 378,219    
    Provision for loan losses $ 2,209    $ 5,126  $ 19,607    $ 16,524    
    Provision for loan losses – acquisition day 1 non-PCD   –     –   –     8,750    
    Total provision for loan losses $ 2,209   $ 5,126 $ 19,607   $ 25,274    
      Net interest income after provision for loan losses $ 103,896   $ 94,047 $ 380,515   $ 352,945    
    Noninterest income          
    Service charges on deposit accounts $ 4,411   $ 4,165 $ 17,087   $ 15,425    
    Card services income   5,652     5,360   22,331     20,829    
    Retirement plan administration fees   12,924     11,226   56,587     47,221    
    Wealth management   10,842     9,152   41,641     34,763    
    Insurance services   3,883     3,659   17,032     15,667    
    Bank owned life insurance income   2,271     1,776   8,325     6,750    
    Net securities gains (losses)   222     507   2,789     (9,315 )  
    Other   2,221     2,643   11,032     10,838    
      Total noninterest income $ 42,426   $ 38,488 $ 176,824   $ 142,178    
    Noninterest expense          
    Salaries and employee benefits $ 61,749   $ 50,013 $ 232,487   $ 194,250    
    Technology and data services   10,220     10,174   39,139     38,163    
    Occupancy   7,786     7,175   31,309     28,408    
    Professional fees and outside services   4,843     5,115   19,132     17,601    
    Amortization of intangible assets   2,080     2,131   8,443     4,734    
    Reserve for unfunded loan commitments   (125 )   300   (705 )   30    
    Impairment of a minority interest equity investment   –     4,750   –     4,750    
    Acquisition expenses   988     254   1,531     9,978    
    Other   13,234     12,839   46,545     43,750    
      Total noninterest expense $ 100,775   $ 92,751 $ 377,881   $ 341,664    
    Income before income tax expense $ 45,547   $ 39,784 $ 179,458   $ 153,459    
    Income tax expense   9,542     9,338   38,817     34,677    
       Net income $ 36,005   $ 30,446 $ 140,641   $ 118,782    
    Earnings Per Share          
    Basic $ 0.76   $ 0.65 $ 2.98   $ 2.67    
    Diluted $ 0.76   $ 0.64 $ 2.97   $ 2.65    
    NBT Bancorp Inc. and Subsidiaries          
    Quarterly Consolidated Statements of Income          
    (unaudited, in thousands except per share data)          
               
        2024   2023
      4th Q 3rd Q 2nd Q 1st Q 4th Q
    Interest, fee and dividend income          
    Interest and fees on loans $ 141,103   $ 141,991 $ 136,606   $ 133,146   $ 132,738
    Securities available for sale   8,773     7,815   7,562     7,124     7,208
    Securities held to maturity   4,931     5,042   5,190     5,303     5,374
    Other   2,930     1,382   1,408     1,364     5,594
      Total interest, fee and dividend income $ 157,737   $ 156,230 $ 150,766   $ 146,937   $ 150,914
    Interest expense          
    Deposits $ 46,815   $ 49,106 $ 46,688   $ 44,339   $ 42,753
    Short-term borrowings   918     1,431   2,899     3,421     4,951
    Long-term debt   293     292   291     290     294
    Subordinated debt   1,816     1,810   1,806     1,800     1,795
    Junior subordinated debt   1,790     1,922   1,908     1,913     1,948
      Total interest expense $ 51,632   $ 54,561 $ 53,592   $ 51,763   $ 51,741
    Net interest income $ 106,105   $ 101,669 $ 97,174   $ 95,174   $ 99,173
    Provision for loan losses $ 2,209   $ 2,920 $ 8,899   $ 5,579   $ 5,126
    Provision for loan losses – acquisition day 1 non-PCD   –     –   –     –     –
    Total provision for loan losses $ 2,209   $ 2,920 $ 8,899   $ 5,579   $ 5,126
      Net interest income after provision for loan losses $ 103,896   $ 98,749 $ 88,275   $ 89,595   $ 94,047
    Noninterest income          
    Service charges on deposit accounts $ 4,411   $ 4,340 $ 4,219   $ 4,117   $ 4,165
    Card services income   5,652     5,897   5,587     5,195     5,360
    Retirement plan administration fees   12,924     14,578   14,798     14,287     11,226
    Wealth management   10,842     10,929   10,173     9,697     9,152
    Insurance services   3,883     4,913   3,848     4,388     3,659
    Bank owned life insurance income   2,271     1,868   1,834     2,352     1,776
    Net securities gains (losses)   222     476   (92 )   2,183     507
    Other   2,221     2,773   2,865     3,173     2,643
      Total noninterest income $ 42,426   $ 45,774 $ 43,232   $ 45,392   $ 38,488
    Noninterest expense          
    Salaries and employee benefits $ 61,749   $ 59,641 $ 55,393   $ 55,704   $ 50,013
    Technology and data services   10,220     9,920   9,249     9,750     10,174
    Occupancy   7,786     7,754   7,671     8,098     7,175
    Professional fees and outside services   4,843     4,871   4,565     4,853     5,115
    Amortization of intangible assets   2,080     2,062   2,133     2,168     2,131
    Reserve for unfunded loan commitments   (125 )   250   (380 )   (450 )   300
    Impairment of a minority interest equity investment   –     –   –     –     4,750
    Acquisition expenses   988     543   –     –     254
    Other   13,234     10,704   10,957     11,650     12,839
      Total noninterest expense $ 100,775   $ 95,745 $ 89,588   $ 91,773   $ 92,751
    Income before income tax expense $ 45,547   $ 48,778 $ 41,919   $ 43,214   $ 39,784
    Income tax expense   9,542     10,681   9,203     9,391     9,338
       Net income $ 36,005   $ 38,097 $ 32,716   $ 33,823   $ 30,446
    Earnings Per Share          
    Basic $ 0.76   $ 0.81 $ 0.69   $ 0.72   $ 0.65
    Diluted $ 0.76   $ 0.80 $ 0.69   $ 0.71   $ 0.64
    NBT Bancorp Inc. and Subsidiaries                        
    Average Quarterly Balance Sheets                        
    (unaudited, dollars in thousands)                        
                             
        Average
    Balance    		 Yield /
    Rates    		 Average
    Balance    		 Yield /
    Rates    		 Average
    Balance    		 Yield /
    Rates    		 Average
    Balance    		 Yield /
    Rates    		 Average
    Balance    		 Yield /
    Rates    		  
        Q4 – 2024 Q3 – 2024 Q2 – 2024 Q1 – 2024 Q4 – 2023  
    Assets                        
    Short-term interest-bearing accounts   $ 184,988 5.27% $ 62,210 4.87% $ 48,861 5.48% $ 47,972 4.48% $ 319,907 5.59%  
    Securities taxable(1)     2,317,034 2.10%   2,266,930 1.99%   2,280,767 1.97%   2,278,029 1.91%   2,310,409 1.88%  
    Securities tax-exempt(1)(5)     211,493 3.46%   217,251 3.47%   226,032 3.56%   230,468 3.58%   232,575 3.51%  
    FRB and FHLB stock     33,261 5.75%   35,395 6.97%   40,283 7.41%   42,296 7.89%   47,994 8.98%  
    Loans(1)(6)     9,957,879 5.65%   9,865,412 5.74%   9,772,014 5.63%   9,674,892 5.54%   9,653,191 5.47%  
    Total interest-earning assets   $ 12,704,655 4.96% $ 12,447,198 5.01% $ 12,367,957 4.92% $ 12,273,657 4.84% $ 12,564,076 4.79%  
    Other assets     1,093,419     1,072,277     1,064,487     1,055,386     1,052,024    
    Total assets   $ 13,798,074   $ 13,519,475   $ 13,432,444   $ 13,329,043   $ 13,616,100    
    Liabilities and stockholders’ equity                        
    Money market deposit accounts   $ 3,504,937 3.27% $ 3,342,845 3.68% $ 3,254,252 3.65% $ 3,129,160 3.56% $ 3,045,531 3.43%  
    NOW deposit accounts     1,664,960 0.91%   1,600,547 0.87%   1,603,695 0.78%   1,600,288 0.75%   1,645,401 0.80%  
    Savings deposits     1,561,703 0.05%   1,566,316 0.05%   1,586,753 0.05%   1,607,659 0.04%   1,666,915 0.04%  
    Time deposits     1,446,798 3.85%   1,442,424 4.00%   1,391,062 4.00%   1,352,559 4.00%   1,343,548 3.81%  
    Total interest-bearing deposits   $ 8,178,398 2.28% $ 7,952,132 2.46% $ 7,835,762 2.40% $ 7,689,666 2.32% $ 7,701,395 2.20%  
    Federal funds purchased     – –   2,609 5.34%   29,945 5.56%   19,769 5.53%   217 5.48%  
    Repurchase agreements     116,408 3.13%   98,035 2.80%   86,405 1.55%   82,419 1.55%   82,387 1.59%  
    Short-term borrowings     174 4.57%   48,875 5.74%   155,159 5.58%   213,390 5.34%   345,250 5.31%  
    Long-term debt     29,657 3.93%   29,696 3.91%   29,734 3.94%   29,772 3.92%   29,809 3.91%  
    Subordinated debt, net     120,967 5.97%   120,594 5.97%   120,239 6.04%   119,873 6.04%   119,531 5.96%  
    Junior subordinated debt     101,196 7.04%   101,196 7.56%   101,196 7.58%   101,196 7.60%   101,196 7.64%  
    Total interest-bearing liabilities   $ 8,546,800 2.40% $ 8,353,137 2.60% $ 8,358,440 2.58% $ 8,256,085 2.52% $ 8,379,785 2.45%  
    Demand deposits     3,438,194     3,389,894     3,323,906     3,356,607     3,535,815    
    Other liabilities     295,292     292,446     306,747     286,749     326,857    
    Stockholders’ equity     1,517,788     1,483,998     1,443,351     1,429,602     1,373,643    
    Total liabilities and stockholders’ equity   $ 13,798,074   $ 13,519,475   $ 13,432,444   $ 13,329,043   $ 13,616,100    
    Interest rate spread     2.56%   2.41%   2.34%   2.32%   2.34%  
    Net interest margin (FTE)(1)     3.34%   3.27%   3.18%   3.14%   3.15%  
    NBT Bancorp Inc. and Subsidiaries                
    Average Year-to-Date Balance Sheets              
    (unaudited, dollars in thousands)                
                     
        Average   Yield/ Average   Yield/  
        Balance Interest Rates Balance Interest Rates
    		 
    Twelve Months Ended December 31,     2024   2023  
    Assets                
    Short-term interest-bearing accounts   $ 86,213 $ 4,412 5.12% $ 126,765 $ 6,259 4.94%  
    Securities taxable(1)     2,285,725   45,588 1.99%   2,377,596   45,176 1.90%  
    Securities tax-exempt(1)(5)     221,273   7,788 3.52%   214,053   6,730 3.14%  
    FRB and FHLB stock     37,789   2,672 7.07%   48,641   3,368 6.92%  
    Loans(1)(6)     9,818,064   553,784 5.64%   8,803,228   463,290 5.26%  
    Total interest-earning assets   $ 12,449,064 $ 614,244 4.93% $ 11,570,283 $ 524,823 4.54%  
    Other assets     1,071,455       923,850      
    Total assets   $ 13,520,519     $ 12,494,133      
    Liabilities and stockholders’ equity                
    Money market deposit accounts   $ 3,308,433 $ 116,982 3.54% $ 2,418,450 $ 62,475 2.58%  
    NOW deposit accounts     1,617,456   13,442 0.83%   1,555,414   8,298 0.53%  
    Savings deposits     1,580,517   734 0.05%   1,715,749   650 0.04%  
    Time deposits     1,408,410   55,790 3.96%   1,006,867   33,218 3.30%  
    Total interest-bearing deposits   $ 7,914,816 $ 186,948 2.36% $ 6,696,480 $ 104,641 1.56%  
    Federal funds purchased     13,016   721 5.54%   24,575   1,269 5.16%  
    Repurchase agreements     95,879   2,255 2.35%   70,251   747 1.06%  
    Short-term borrowings     103,963   5,693 5.48%   450,377   23,592 5.24%  
    Long-term debt     29,715   1,166 3.92%   24,247   925 3.81%  
    Subordinated debt, net     120,420   7,232 6.01%   105,756   6,076 5.75%  
    Junior subordinated debt     101,196   7,533 7.44%   101,196   7,320 7.23%  
    Total interest-bearing liabilities   $ 8,379,005 $ 211,548 2.52% $ 7,472,882 $ 144,570 1.93%  
    Demand deposits     3,377,352       3,463,608      
    Other liabilities     295,301       285,310      
    Stockholders’ equity     1,468,861       1,272,333      
    Total liabilities and stockholders’ equity $ 13,520,519     $ 12,494,133      
    Net interest income (FTE)(1)     $ 402,696     $ 380,253    
    Interest rate spread       2.41%     2.61%  
    Net interest margin (FTE)(1)       3.23%     3.29%  
    Taxable equivalent adjustment     $ 2,574     $ 2,034    
    Net interest income     $ 400,122     $ 378,219    
    (1) The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:    
                   
      Non-GAAP measures            
      (unaudited, dollars in thousands except per share data)            
                   
          2024     2023    
        4th Q 3rd Q 2nd Q 1st Q 4th Q  
      Operating net income            
      Net income $ 36,005   $ 38,097   $ 32,716   $ 33,823   $ 30,446    
      Acquisition expenses   988     543     –     –     254    
      Impairment of a minority interest equity investment   –     –     –     –     4,750    
      Securities (gains) losses   (222 )   (476 )   92     (2,183 )   (507 )  
      Adjustments to net income $ 766   $ 67   $ 92   $ (2,183 ) $ 4,497    
      Adjustments to net income (net of tax) $ 604   $ 52   $ 72   $ (1,703 ) $ 3,435    
      Operating net income $ 36,609   $ 38,149   $ 32,788   $ 32,120   $ 33,881    
      Operating diluted earnings per share $ 0.77   $ 0.80   $ 0.69   $ 0.68   $ 0.72    
                   
          2024     2023    
        4th Q 3rd Q 2nd Q 1st Q 4th Q  
      FTE adjustment            
      Net interest income $ 106,105   $ 101,669   $ 97,174   $ 95,174   $ 99,173    
      Add: FTE adjustment   619     639     658     658     669    
      Net interest income (FTE) $ 106,724   $ 102,308   $ 97,832   $ 95,832   $ 99,842    
      Average earning assets $ 12,704,655   $ 12,447,198   $ 12,367,957   $ 12,273,657   $ 12,564,076    
      Net interest margin (FTE)(3)   3.34 %   3.27 %   3.18 %   3.14 %   3.15 %  
                   
        12 Months Ended December 31,        
          2024     2023          
      FTE adjustment            
      Net interest income $ 400,122   $ 378,219          
      Add: FTE adjustment   2,574     2,034          
      Net interest income (FTE) $ 402,696   $ 380,253          
      Average earning assets $ 12,449,064   $ 11,570,283          
      Net interest margin (FTE)   3.23 %   3.29 %        
                   
      Interest income for tax-exempt securities and loans have been adjusted to an FTE basis using the statutory Federal income tax rate of 21%.
    (1) The following tables provide the Non-GAAP reconciliations for the Non-GAAP measures contained in this release:  
                   
      Non-GAAP measures (continued)            
      (unaudited, dollars in thousands)            
                   
          2024     2023    
        4th Q 3rd Q 2nd Q 1st Q 4th Q  
      Tangible equity to tangible assets            
      Total equity $ 1,526,141   $ 1,521,980   $ 1,461,955   $ 1,441,415   $ 1,425,691    
      Intangible assets   399,023     397,853     398,686     400,819     402,294    
      Total assets $ 13,786,666   $ 13,839,552   $ 13,501,909   $ 13,439,199   $ 13,309,040    
      Tangible equity to tangible assets   8.42 %   8.36 %   8.11 %   7.98 %   7.93 %  
                   
          2024     2023    
        4th Q 3rd Q 2nd Q 1st Q 4th Q  
      Return on average tangible common equity          
      Net income $ 36,005   $ 38,097   $ 32,716   $ 33,823   $ 30,446    
      Amortization of intangible assets (net of tax)   1,560     1,547     1,600     1,626     1,599    
      Net income, excluding intangibles amortization $ 37,565   $ 39,644   $ 34,316   $ 35,449   $ 32,045    
                   
      Average stockholders’ equity $ 1,517,788   $ 1,483,998   $ 1,443,351   $ 1,429,602   $ 1,373,643    
      Less: average goodwill and other intangibles   399,139     399,113     399,968     401,756     401,978    
      Average tangible common equity $ 1,118,649   $ 1,084,885   $ 1,043,383   $ 1,027,846   $ 971,665    
      Return on average tangible common equity(3)   13.36 %   14.54 %   13.23 %   13.87 %   13.08 %  
                   
        12 Months Ended December 31,        
          2024     2023          
      Return on average tangible common equity          
      Net income $ 140,641   $ 118,782          
      Amortization of intangible assets (net of tax)   6,332     3,551          
      Net income, excluding intangibles amortization $ 146,973   $ 122,333          
                   
      Average stockholders’ equity $ 1,468,861   $ 1,272,333          
      Less: average goodwill and other intangibles   399,989     332,667          
      Average tangible common equity $ 1,068,872   $ 939,666          
      Return on average tangible common equity   13.75 %   13.02 %        
                   
    (2) Non-GAAP measure – Stockholders’ equity less goodwill and intangible assets divided by common shares outstanding.  
    (3) Annualized.            
    (4) Total past due loans, defined as loans 30 days or more past due and in an accrual status.      
    (5) Securities are shown at average amortized cost.          
    (6) For purposes of these computations, nonaccrual loans and loans held for sale are included in the average loan balances outstanding.
    Contact: Scott A. Kingsley, President and CEO
      Annette L. Burns, Executive Vice President and CFO
      NBT Bancorp Inc.
      52 South Broad Street
      Norwich, NY 13815
      607-337-6589

    This press release was published by a CLEAR® Verified individual.

    The MIL Network –

  • MIL-OSI: Lake Shore Bancorp, Inc. Declares Fourth Quarter 2024 Dividend

    Source: GlobeNewswire (MIL-OSI)

    DUNKIRK, N.Y., Jan. 27, 2025 (GLOBE NEWSWIRE) — Lake Shore Bancorp, Inc. (the “Company”) (NASDAQ: LSBK), the holding company for Lake Shore Savings Bank (the “Bank”), announced today that the Board of Directors declared a cash dividend of $0.18 per share on its outstanding common stock on January 27, 2025. The dividend is expected to be paid on February 14, 2025 to stockholders of record as of February 10, 2025. The Company received the written approval from the Federal Reserve Bank of Philadelphia (the “Reserve Bank”) on January 9, 2025 to pay a cash dividend of $0.18 per share to its stockholders.

    About Lake Shore
    Lake Shore Bancorp, Inc. (NASDAQ Global Market: LSBK) is the mid-tier holding company of Lake Shore Savings Bank, a federally chartered, community-oriented financial institution headquartered in Dunkirk, New York. The Bank has ten full-service branch locations in Western New York, including four in Chautauqua County and six in Erie County. The Bank offers a broad range of retail and commercial lending and deposit services. The Company’s common stock is traded on the NASDAQ Global Market as “LSBK”. Additional information about the Company is available at www.lakeshoresavings.com.

    Safe-Harbor
    This release contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, that are based on current expectations, estimates and projections about the Company’s and the Bank’s industry, and management’s beliefs and assumptions. Words such as anticipates, expects, intends, plans, believes, estimates and variations of such words and expressions are intended to identify forward-looking statements. Such statements reflect management’s current views of future events and operations. These forward-looking statements are based on information currently available to the Company as of the date of this release. It is important to note that these forward-looking statements are not guarantees of future performance and involve and are subject to significant risks, contingencies, and uncertainties, many of which are difficult to predict and are generally beyond our control including, but not limited to, compliance with the Written Agreement with the Federal Reserve Bank of Philadelphia, data loss or other security breaches, including a breach of our operational or security systems, policies or procedures, including cyber-attacks on us or on our third party vendors or service providers, economic conditions, the effect of changes in monetary and fiscal policy, inflation, unanticipated changes in our liquidity position, climate change, geopolitical conflicts, public health issues, increased unemployment, deterioration in the credit quality of the loan portfolio and/or the value of the collateral securing repayment of loans, reduction in the value of investment securities, the cost and ability to attract and retain key employees, regulatory or legal developments, tax policy changes, dividend policy changes, and our ability to implement and execute our business plan and strategy and expand our operations. These factors should be considered in evaluating forward looking statements and undue reliance should not be placed on such statements, as our financial performance could differ materially due to various risks or uncertainties. We do not undertake to publicly update or revise our forward-looking statements if future changes make it clear that any projected results expressed or implied therein will not be realized.

    Source: Lake Shore Bancorp, Inc.
    Category: Financial

    Investor Relations/Media Contact
    Kim C. Liddell
    President, CEO, and Director
    Lake Shore Bancorp, Inc.
    31 East Fourth Street
    Dunkirk, New York 14048
    (716) 366-4070 ext. 1012

    The MIL Network –

  • MIL-OSI: Preferred Bank Reports Fourth Quarter and Annual Results

    Source: GlobeNewswire (MIL-OSI)

    LOS ANGELES, Jan. 27, 2025 (GLOBE NEWSWIRE) — Preferred Bank (NASDAQ: PFBC), one of the larger independent California banks, today reported results for the quarter ended December 31, 2024. Preferred Bank (“the Bank”) reported net income of $30.2 million or $2.25 per diluted share for the fourth quarter of 2024. This represents a decrease in net income of $3.2 million from the prior quarter and a decrease of $5.6 from the same quarter last year. The decrease compared to both periods was mainly due to a one-time $8.1 million increase in occupancy expense this quarter due to the previously disclosed error in the calculation of ASC 842, Accounting for Leases. As previously disclosed, this calculation error goes back to the adoption of ASC 842 in 2019 and the $8.1 million item represents the cumulative erroneous calculation through the years from 2019 to present.

    Net interest income was $69.2 million, up by $325,000 compared to last quarter’s $68.8 million and down slightly from the $69.4 million recorded one year ago. Noninterest expense was $28.2 million, an increase of $6.2 million from the previous quarter and an increase of $10.4 million over the same quarter last year. These increases were due to the aforementioned non-recurring occupancy expense item. The provision for credit losses was $2.0 million this quarter compared to $3.2 million last quarter and compared to $3.5 million this quarter last year. Despite the non-recurring expense item, Preferred Bank continues to deliver top-of-peer group profitability metrics and long term shareholder returns.

    Highlights for the Quarter:

    • Return on average assets was 1.74%
    • Return on beginning equity of 16.03%
    • Net interest margin (NIM) held strong at 4.06%
    • Total loans increased by $71 million or 1.3%
    • Efficiency ratio was 38.8%

    Highlights for the Year:

    • Return on average assets was 1.91%
    • Return on beginning equity of 18.80%
    • The NIM was 4.08%
    • Total loans increased by $369 million or 7.0%
    • Efficiency ratio was 31.47%

    Li Yu, Chairman and CEO, commented, “We completed the year 2024 with net income of $130.7 million or $9.64 per diluted share. Return on assets was 1.91% for the year and return on beginning equity was 18.8%, which should be well above peer group and the industry average.

    ”Fourth quarter net income of $30.2 million or $2.25 per diluted share was negatively impacted by a correction to our lease expense of $8.1 million. This correction was previously announced and is non-recurring in nature. The after-tax effect of this item was approximately $0.42.

    “Under a high interest rate and high inflation environment, Preferred Bank’s loan growth and deposit growth were less than our historical performance. 2024 loan growth of 7.0% and deposit growth of 3.6% were still in- line with industry averages.

    “At December 31, 2024, our credit metrics improved from September 30, 2024. Non-performing loans decreased by $10.0 million or 52% and criticized loans decreased by $76.7 million or 32.6%. The Bank’s allowance for credit losses to total loans was 1.27% as of December 31, 2024.

    “The recent wildfires in the Los Angeles area have wrought unprecedented damage to our community. We at Preferred Bank will be dedicated to making the utmost effort to help rebuild the homes and businesses lost in this tragedy. At this time, the Bank has confirmed the existence of one property that secures a commercial loan which was affected by the fires but we can confirm the property had the appropriate insurance. We are most grateful that none of our residential home mortgage borrowers have been affected and that none of our employees have been directly impacted.

    “In December, our Board of Directors announced an increase in the quarterly dividend from $0.70 per quarter to $0.75 per quarter, the first of which is payable in January of 2025. For the year, we also repurchased 464,314 shares of our common stock for total consideration of $34.3 million. At December 31, 2024, the Bank’s tier 1 leverage ratio improved to 11.33% from 10.85% as of December 31, 2023. Tangible book value per common share increased from $50.54 at the end of 2023 to $57.86 as of December 31, 2024, a 13.1% increase.

    “We look forward to continue our consistently strong financial performance into 2025.”

    Results of Operations – Quarter

    Net Interest Income and Net Interest Margin. Net interest income before provision for credit losses was $69.2 million for the fourth quarter of 2024. This was a $325,000 increase from the $68.8 million recorded in the prior quarter and a $223,000 decrease from the same quarter last year. Compared to the prior quarter, interest income was down by $3.6 million but interest expense also decreased by $3.9 million. In comparison to the same quarter last year, interest income increased by $894,000 but interest expense increased by $1.1 million. The Bank’s net interest margin came in at 4.06% for the quarter, this is down slightly from the 4.10% recorded last quarter and was down by 18 basis points from the 4.24% margin achieved in the fourth quarter of the prior year. Management believes that efforts to reduce the Bank’s asset sensitivity have been largely effective as the margin has held up much better than originally anticipated when the first rate cut occurred in September of 2024.

    Noninterest Income. For the fourth quarter of 2024, noninterest income was $3.6 million compared with $2.1 million for the same quarter last year and compared to $3.5 million for the third quarter of 2024. The increase over the prior quarter was primarily due to other income and fees which increased by $131,000. In comparing to the same quarter last year, letter of credit (LC) fee income was up by $491,000 and last year the Bank recorded a loss on sale of investment securities of $929,000. Finally, other income was up by $303,000 over last year.

    Noninterest Expense. Total noninterest expense was $28.2 million for the fourth quarter of 2024 compared to $22.1 million for the third quarter of 2024 and compared to the $17.9 million recorded in the same period last year. The primary reason for the increase over the prior year and over the prior quarter was the $8.1 million occupancy expense adjustment related to accounting pronouncement ASC 842 mentioned earlier. In comparing to the prior quarter; personnel expense was down by $246,000, business development expense was up by $99,000 and OREO expense was lower by $1.8 million due to a $1.6 million valuation allowance recorded last quarter. In comparing to same quarter last year; personnel expense was up by $1.2 million due to additional personnel, professional services was up by $251,000 and other expense was up by $360,000.   For the quarter ended December 31, 2024, the Bank’s efficiency ratio was 38.8%, higher than the 30.6% posted last quarter and higher than the 25.0% posted this quarter last year.

    Income Taxes. The Bank recorded a provision for income taxes of $12.3 million for the fourth quarter of 2024. This represents an effective tax rate (“ETR”) of 29.0% which is identical to the ETR for last quarter and up from the 28.5% ETR recorded in the same period last year. The Bank’s ETR will fluctuate slightly from quarter to quarter within a fairly small range due to the timing of taxable events throughout the year.

    Balance Sheet Summary

    Total gross loans at December 31, 2024 were $5.64 billion, an increase of $369 million from the total of $5.27 billion as of December 31, 2023. Total deposits were $5.92 billion, an increase of $207.5 million from the $5.71 billion as of December 31, 2023. Total assets were $6.92 billion, an increase of $264.2 million over the total of $6.66 billion as of December 31, 2023.

    Results of Operations – Year

    The Bank’s net income for the year ended December 31, 2024 was $130.7 million or $9.64 per diluted share. This is down from $150.0 million or $10.52 per diluted share for 2023. The decrease was due to net interest income which was down by $16.7 million as well as noninterest expense which increased by $13.4 million. This was partially offset by noninterest income which increased in 2024 by $6.5 million over 2023. Despite this decline, the Bank’s earnings metrics still remain top-of-class as ROA was 1.91%, ROBE was 18.8% and the Bank’s efficiency ratio was 31.5%. Also, during 2024 the Bank repurchased 464,314 shares at an average price of $73.76 which contributed approximately $0.17 per diluted share for 2024.

    Asset Quality

    Non-accrual loans and loans 90 days past due and still accruing totaled $9.4 million as of December 31, 2024, a decrease of $10.0 million from $19.4 million on September 30, 2024 and a decrease of $19.3 million from the $28.7 million in nonperforming loans as of December 31, 2023. Total net charge-offs for the quarter were $6.6 million and all were previously fully reserved.

    Total criticized loans decreased to $158.1 million from $234.8 million last quarter. The Bank expects to upgrade a number of the remaining credits in this cohort once more collateral is in place.

    Allowance for Credit Losses

    The provision for credit losses for the fourth quarter of 2024 was $2.0 million compared to $3.2 million last quarter and compared to $3.5 million in the same quarter last year.   The Bank’s allowance coverage ratio declined to 1.27% of loans as compared to 1.36% in the prior quarter.

    Capitalization

    As of December 31, 2024, the Bank’s leverage ratio was 11.33%, the common equity tier 1 capital ratio was 11.80% and the total capital ratio stood at 15.11%. As of December 31, 2023, the Bank’s leverage ratio was 10.85%, the common equity tier 1 ratio was 11.57% and the total capital ratio was 15.18%.

    Conference Call and Webcast

    A conference call with simultaneous webcast to discuss Preferred Bank’s fourth quarter 2024 financial results will be held tomorrow, January 28, 2025 at 2:00 p.m. Eastern / 11:00 a.m. Pacific. Interested participants and investors may access the conference call by dialing 844-826-3037 (domestic) or 412-317-5182 (international) and referencing “Preferred Bank.” There will also be a live webcast of the call available at the Investor Relations section of Preferred Bank’s website at www.preferredbank.com.

    Preferred Bank’s Chairman and CEO Li Yu, President and Chief Operating Officer Wellington Chen, Chief Financial Officer Edward J. Czajka, Chief Credit Officer Nick Pi and Deputy Chief Operating Officer Johnny Hsu will discuss Preferred Bank’s financial results, business highlights and outlook. After the live webcast, a replay will be available at the Investor Relations section of Preferred Bank’s website. A replay of the call will also be available at 877-344-7529 (domestic) or 412-317-0088 (international) through February 11, 2025; the passcode is 6335378.

    About Preferred Bank

    Preferred Bank is one of the larger independent commercial banks headquartered in California. The Bank is chartered by the State of California, and its deposits are insured by the Federal Deposit Insurance Corporation, or FDIC, to the maximum extent permitted by law. The Bank conducts its banking business from its main office in Los Angeles, California, and through twelve full-service branch banking offices in California (Alhambra, Century City, City of Industry, Torrance, Arcadia, Irvine (2), Diamond Bar, Pico Rivera, Tarzana and San Francisco (2)), one branch in Flushing, New York and a branch office in the Houston, Texas suburb of Sugar Land. In addition, the Bank also operates a loan production office in Sunnyvale, California. Preferred Bank offers a broad range of deposit and loan products and services to both commercial and consumer customers. The Bank provides personalized deposit services as well as real estate finance, commercial loans and trade finance to small and mid-sized businesses, entrepreneurs, real estate developers, professionals and high net worth individuals. Although originally founded as a Chinese-American Bank, Preferred Bank now derives most of its customers from the diversified mainstream market but does continue to benefit from the significant migration to California of ethnic Chinese from China and other areas of East Asia.

    Forward-Looking Statements

    This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about the Bank’s future financial and operating results, the Bank’s plans, objectives, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of the Bank’s management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: changes in economic conditions; changes in the California real estate market; the loss of senior management and other employees; natural disasters or recurring energy shortage; changes in interest rates; competition from other financial services companies; ineffective underwriting practices; inadequate allowance for loan and lease losses to cover actual losses; risks inherent in construction lending; adverse economic conditions in Asia; downturn in international trade; inability to attract deposits; inability to raise additional capital when needed or on favorable terms; inability to manage growth; inadequate communications, information, operating and financial control systems, technology from fourth party service providers; the U.S. government’s monetary policies; government regulation; environmental liability with respect to properties to which the bank takes title; and the threat of terrorism. Additional factors that could cause the Bank’s results to differ materially from those described in the forward-looking statements can be found in the Bank’s 2023 Annual Report on Form 10-K filed with the Federal Deposit Insurance Corporation which can be found on Preferred Bank’s website. The forward-looking statements in this press release speak only as of the date of the press release, and the Bank assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those contained in the forward-looking statements. For additional information about Preferred Bank, please visit the Bank’s website at www.preferredbank.com.

    Financial Tables to Follow

     
    PREFERRED BANK
    Condensed Consolidated Statements of Operations
    (unaudited)
    (in thousands, except for net income per share and shares)
               
      For the Quarter Ended
      December 31,   September 30,   December 31,
      2024   2024   2023
    Interest income:          
    Loans, including fees $ 111,596     $ 114,112     $ 107,709  
    Investment securities   14,013       15,032       16,973  
    Fed funds sold   249       280       282  
    Total interest income   125,858       129,424       124,964  
               
    Interest expense:          
    Interest-bearing demand   18,245       23,211       21,716  
    Savings   85       84       72  
    Time certificates   37,030       35,956       32,455  
    Subordinated debt   1,325       1,325       1,325  
    Total interest expense   56,685       60,576       55,568  
    Net interest income   69,173       68,848       69,396  
    Provision for credit losses   2,000       3,200       3,500  
    Net interest income after provision for credit losses   67,173       65,648       65,896  
               
    Noninterest income:          
    Fees & service charges on deposit accounts   761       747       857  
    Letters of credit fee income   1,977       1,959       1,486  
    BOLI income   102       108       105  
    Net loss on called and sale of investment securities   –       –       (929 )
    Net gain on sale of loans   112       91       205  
    Other income   685       554       382  
    Total noninterest income   3,637       3,459       2,106  
               
    Noninterest expense:          
    Salary and employee benefits   13,279       13,525       12,058  
    Net occupancy expense   10,110       1,883       1,536  
    Business development and promotion expense   340       241       239  
    Professional services   1,606       1,816       1,355  
    Office supplies and equipment expense   396       435       391  
    OREO valuation allowance and related expense   155       1,915       294  
    Other   2,360       2,274       2,000  
    Total noninterest expense   28,246       22,089       17,873  
    Income before provision for income taxes   42,564       47,018       50,129  
    Income tax expense   12,343       13,635       14,290  
    Net income $ 30,221     $ 33,383     $ 35,839  
               
    Income per share available to common shareholders          
    Basic $ 2.29     $ 2.50     $ 2.63  
    Diluted $ 2.25     $ 2.46     $ 2.60  
               
    Weighted-average common shares outstanding          
    Basic   13,190,696       13,327,848       13,617,225  
    Diluted   13,442,294       13,544,273       13,804,315  
               
    Cash dividends per common share $ 0.75     $ 0.70     $ 0.70  
               
    PREFERRED BANK
    Condensed Consolidated Statements of Operations
    (unaudited)
    (in thousands, except for net income per share and shares)
               
      For the Twelve Months Ended    
      December 31,   December 31,   Change
      2024   2023   %
    Interest income:          
    Loans, including fees $ 445,139     $ 412,505       7.9 %
    Investment securities   62,854       64,427       -2.4 %
    Fed funds sold   1,103       1,056       4.5 %
    Total interest income   509,096       477,988       6.5 %
               
    Interest expense:          
    Interest-bearing demand   87,951       75,417       16.6 %
    Savings   323       225       43.5 %
    Time certificates   142,894       103,853       37.6 %
    FHLB borrowings   0       3,819       -100.0 %
    Subordinated debt   5,300       5,300       0.0 %
    Total interest expense   236,468       188,614       25.4 %
    Net interest income   272,628       289,374       -5.8 %
    Provision for credit losses   12,100       10,000       21.0 %
    Net interest income after provision for credit losses   260,528       279,374       -6.7 %
               
    Noninterest income:          
    Fees & service charges on deposit accounts   3,172       3,333       -4.8 %
    Letters of credit fee income   7,188       5,798       24.0 %
    BOLI income   420       412       2.1 %
    Net loss on called and sale of investment securities   –       (5,046 )     -100.0 %
    Net gain on sale of loans   659       752       -12.4 %
    Other income   2,126       1,864       14.0 %
    Total noninterest income   13,565       7,113       90.7 %
               
    Noninterest expense:          
    Salary and employee benefits   53,648       51,314       4.5 %
    Net occupancy expense   15,420       6,049       154.9 %
    Business development and promotion expense   1,250       737       69.6 %
    Professional services   6,711       5,270       27.3 %
    Office supplies and equipment expense   1,781       1,588       12.2 %
    OREO valuation allowance and related expense   2,234       3,344       -33.2 %
    Other   9,016       8,332       8.2 %
    Total noninterest expense   90,060       76,634       17.5 %
    Income before provision for income taxes   184,033       209,853       -12.3 %
    Income tax expense   53,371       59,813       -10.8 %
    Net income $ 130,662     $ 150,040       -12.9 %
               
    Income per share available to common shareholders          
    Basic $ 9.79     $ 10.64       -8.0 %
    Diluted $ 9.64     $ 10.52       -8.4 %
               
    Weighted-average common shares outstanding          
    Basic   13,347,004       14,095,745       -5.3 %
    Diluted   13,554,266       14,261,644       -5.0 %
               
    Dividends per share $ 2.85     $ 2.35       21.3 %
               
    PREFERRED BANK
    Condensed Consolidated Statements of Financial Condition
    (unaudited)
    (in thousands)
           
      December 31,   December 31,
      2024   2023
      (Unaudited)   (Audited)
    Assets      
    Cash and due from banks $ 765,515     $ 890,852  
    Fed funds sold   20,000       20,000  
    Cash and cash equivalents   785,515       910,852  
           
    Securities held-to-maturity, at amortized cost   20,021       21,171  
    Securities available-for-sale, at fair value   348,706       313,842  
           
    Loans held for sale, at lower of cost or fair value   2,214       360  
           
    Loans   5,640,615       5,273,498  
    Less allowance for credit losses   (71,477 )     (78,355 )
    Less amortized deferred loan fees, net   (9,234 )     (11,079 )
    Loans, net   5,559,904       5,184,064  
           
    Other real estate owned and repossessed assets   14,991       16,716  
    Customers’ liability on acceptances   –       315  
    Bank furniture and fixtures, net   8,462       9,694  
    Bank-owned life insurance   10,433       10,632  
    Accrued interest receivable   33,561       33,892  
    Investment in affordable housing partnerships   58,346       65,276  
    Federal Home Loan Bank stock, at cost   15,000       15,000  
    Deferred tax assets   47,316       48,991  
    Income tax receivable   2,281       2,391  
    Operating lease right-of-use assets   13,182       22,050  
    Other assets   3,497       4,030  
    Total assets $ 6,923,429     $ 6,659,276  
           
    Liabilities and Shareholders’ Equity      
    Deposits:      
    Noninterest bearing demand deposits $ 704,859     $ 786,995  
    Interest bearing deposits:   2,026,965       2,075,156  
    Savings   30,150       29,167  
    Time certificates of $250,000 or more   1,477,931       1,317,862  
    Other time certificates   1,676,943       1,500,162  
    Total deposits   5,916,848       5,709,342  
           
    Acceptances outstanding   –       315  
    Subordinated debt issuance, net   148,469       148,232  
    Commitments to fund investment in affordable housing partnerships   21,623       30,824  
    Operating lease liabilities   16,990       19,766  
    Accrued interest payable   16,517       16,124  
    Other liabilities   39,830       39,568  
    Total liabilities   6,160,277       5,964,171  
           
    Shareholders’ equity   763,152       695,105  
    Total liabilities and shareholders’ equity   6,923,429       6,659,276  
           
    Book value per common share $ 57.86     $ 50.54  
    Number of common shares outstanding   13,188,776       13,753,246  
                   
    PREFERRED BANK
    Selected Consolidated Financial Information
    (unaudited)
    (in thousands, except for ratios)
               
      For the Quarter Ended
      December 31, September 30, June 30, March 31, December 31,
      2024 2024 2024 2024 2023
    Unaudited historical quarterly operations data:          
    Interest income $ 125,858   $ 129,424   $ 127,294   $ 126,520   $ 124,964  
    Interest expense   56,685     60,576     61,187     58,020     55,568  
    Interest income before provision for credit losses   69,173     68,848     66,107     68,500     69,396  
    Provision for credit losses   2,000     3,200     2,500     4,400     3,500  
    Noninterest income   3,637     3,459     3,404     3,065     2,106  
    Noninterest expense   28,246     22,089     19,697     20,028     17,873  
    Income tax expense   12,343     13,635     13,722     13,671     14,290  
    Net income $ 30,221   $ 33,383   $ 33,592   $ 33,466   $ 35,839  
               
    Earnings per share          
    Basic $ 2.29   $ 2.50   $ 2.51   $ 2.48   $ 2.63  
    Diluted $ 2.25   $ 2.46   $ 2.48   $ 2.44   $ 2.60  
               
    Ratios for the period:          
    Return on average assets   1.74 %   1.95 %   1.97 %   2.00 %   2.15 %
    Return on beginning equity   16.03 %   18.37 %   19.44 %   19.36 %   21.21 %
    Net interest margin (Fully-taxable equivalent)   4.06 %   4.10 %   3.96 %   4.19 %   4.24 %
    Noninterest expense to average assets   1.62 %   1.29 %   1.15 %   1.20 %   1.07 %
    Efficiency ratio   38.79 %   30.55 %   28.34 %   27.99 %   25.00 %
    Net charge-offs to average loans (annualized)   0.47 %   -0.00 %   0.68 %   0.26 %   -0.00 %
               
    Ratios as of period end:          
    Tangible common equity ratio   11.02 %   10.92 %   10.55 %   10.35 %   10.43 %
    Tier 1 leverage capital ratio   11.33 %   11.28 %   10.89 %   10.80 %   10.85 %
    Common equity tier 1 risk-based capital ratio   11.80 %   11.66 %   11.52 %   11.50 %   11.57 %
    Tier 1 risk-based capital ratio   11.80 %   11.66 %   11.52 %   11.50 %   11.57 %
    Total risk-based capital ratio   15.11 %   15.06 %   14.93 %   15.08 %   15.18 %
    Allowances for credit losses to loans at end of period   1.27 %   1.36 %   1.34 %   1.49 %   1.49 %
    Allowance for credit losses to non-performing loans   7.64 x   3.92 x   1.79 x   4.33 x   2.73 x
               
    Average balances:          
    Total securities $ 350,732   $ 356,590   $ 353,357   $ 348,961   $ 349,863  
    Total loans   5,542,558     5,458,613     5,320,360     5,263,562     5,126,918  
    Total earning assets   6,788,487     6,684,766     6,728,498     6,585,853     6,499,469  
    Total assets   6,920,325     6,817,979     6,863,829     6,718,018     6,627,349  
    Total time certificate of deposits   3,144,523     2,874,985     2,884,259     2,852,860     2,767,385  
    Total interest bearing deposits   5,220,655     5,124,245     5,203,034     5,004,834     4,906,947  
    Total deposits   5,905,127     5,828,227     5,901,976     5,761,488     5,689,713  
    Total interest bearing liabilities   5,369,092     5,272,617     5,351,347     5,153,089     5,055,143  
    Total equity   760,345     747,222     715,190     704,996     683,141  
               
    PREFERRED BANK
    Selected Consolidated Financial Information
    (unaudited)
    (in thousands, except for ratios)
           
      For the Twelve Months Ended
      December 31,   December 31,
      2024   2023
           
    Interest income $ 509,096     $ 477,988  
    Interest expense   236,468       188,614  
    Interest income before provision for credit losses   272,628       289,374  
    Provision for credit losses   12,100       10,000  
    Noninterest income   13,565       7,113  
    Noninterest expense   90,060       76,634  
    Income tax expense   53,371       59,813  
    Net income $ 130,662     $ 150,040  
           
    Earnings per share      
    Basic $ 9.79     $ 10.64  
    Diluted $ 9.64     $ 10.52  
           
    Ratios for the period:      
    Return on average assets   1.91 %     2.28 %
    Return on beginning equity   18.80 %     23.80 %
    Net interest margin (Fully-taxable equivalent)   4.08 %     4.49 %
    Noninterest expense to average assets   1.32 %     1.17 %
    Efficiency ratio   31.47 %     25.85 %
    Net charge-off to average loans   0.35 %     0.00 %
           
    Average balances:      
    Total securities $ 352,416     $ 389,584  
    Total loans   5,396,844       5,068,486  
    Total earning assets   6,697,118       5,067,870  
    Total assets   6,830,252       6,452,661  
    Total time certificate of deposits   2,939,543       6,577,690  
    Total interest bearing deposits   5,849,300       2,570,706  
    Total deposits   5,849,300       4,678,893  
    Total interest bearing liabilities   5,849,300       5,577,155  
    Total equity   732,058       4,902,616  
           
    PREFERRED BANK
    Selected Consolidated Financial Information
    (unaudited)
    (in thousands, except for ratios)
                             
            As of
            December 31,   September 30,   June 30,   March 31,   December 31,
            2024   2024   2024   2024   2023
    Unaudited quarterly statement of financial position data:                  
    Assets:                  
      Cash and cash equivalents $ 785,515     $ 804,994     $ 917,677     $ 936,600     $ 910,852  
      Securities held-to-maturity, at amortized cost   20,021       20,311       20,605       20,904       21,171  
      Securities available-for-sale, at fair value   348,706       337,363       331,909       333,411       313,842  
      Loans:                  
        Real estate – Mortgage:                  
          Real estate—Residential $ 790,069     $ 753,453     $ 732,251     $ 724,101     $ 688,058  
          Real estate—Commercial   2,840,771       2,882,506       2,833,430       2,777,608       2,760,761  
          Total Real Estate – Mortgage   3,630,840       3,635,959       3,565,681       3,501,709       3,448,819  
        Real estate – Construction:                  
          R/E Construction — Residential   296,580       274,214       238,062       236,596       246,201  
          R/E Construction — Commercial   287,185       290,308       247,582       213,727       179,775  
          Total real estate construction loans   583,765       564,522       485,644       450,323       425,976  
        Commercial and industrial   1,418,930       1,365,550       1,371,694       1,369,529       1,394,871  
        SBA   6,833       5,424       5,463       3,914       3,469  
        Consumer and others   247       124       118       379       363  
          Gross loans   5,640,615       5,571,579       5,428,600       5,325,854       5,273,498  
      Allowance for credit losses on loans   (71,477 )     (76,051 )     (72,848 )     (79,311 )     (78,355 )
      Net deferred loan fees   (9,234 )     (10,414 )     (10,502 )     (10,460 )     (11,079 )
        Net loans, excluding loans held for sale $ 5,559,904     $ 5,485,114     $ 5,345,250     $ 5,236,083     $ 5,184,064  
      Loans held for sale $ 2,214     $ 225     $ 955     $ 605     $ 360  
        Net loans $ 5,562,118     $ 5,485,339     $ 5,346,205     $ 5,236,688     $ 5,184,424  
                             
      Other real estate owned and repossessed assets $ 14,991     $ 15,082     $ 16,716     $ 16,716     $ 16,716  
      Investment in affordable housing partnerships   58,346       58,009       60,432       62,854       65,276  
      Federal Home Loan Bank stock, at cost   15,000       15,000       15,000       15,000       15,000  
      Other assets   118,732       136,246       138,036       134,040       131,995  
        Total assets $ 6,923,429     $ 6,872,344     $ 6,846,580     $ 6,756,213     $ 6,659,276  
                             
    Liabilities:                  
      Deposits:                  
        Demand $ 704,859     $ 682,859     $ 675,767     $ 709,767     $ 786,995  
        Interest bearing demand   2,026,965       1,994,288       2,326,214       2,159,948       2,075,156  
        Savings   30,150       29,793       28,251       29,261       29,167  
        Time certificates of $250,000 or more   1,477,931       1,478,500       1,406,149       1,349,927       1,317,862  
        Other time certificates   1,676,943       1,682,324       1,442,381       1,552,805       1,500,162  
        Total deposits $ 5,916,848     $ 5,867,764     $ 5,878,762     $ 5,801,708     $ 5,709,342  
                             
      Acceptances outstanding $ –     $ –     $ –     $ –     $ 315  
      Subordinated debt issuance, net   148,469       148,410       148,351       148,292       148,232  
      Commitments to fund investment in affordable housing partnerships   21,623       23,617       27,946       29,647       30,824  
      Other liabilities   73,337       82,436       68,394       77,008       75,458  
        Total liabilities $ 6,160,277     $ 6,122,227     $ 6,123,453     $ 6,056,655     $ 5,964,171  
                             
    Equity:                    
      Net common stock, no par value $ 105,501     $ 109,928     $ 113,509     $ 115,915     $ 134,534  
      Retained earnings   685,108       664,808       640,675       616,417       592,325  
      Accumulated other comprehensive income   (27,457 )     (24,619 )     (31,057 )     (32,774 )     (31,754 )
        Total shareholders’ equity $ 763,152     $ 750,117     $ 723,127     $ 699,558     $ 695,105  
        Total liabilities and shareholders’ equity $ 6,923,429     $ 6,872,344     $ 6,846,580     $ 6,756,213     $ 6,659,276  
                             
    PREFERRED BANK
    Quarter-to-Date Average Balances, Yield and Rates
    (unaudited)
                           
                       
      Three months ended December 31,   Three months ended September 30,   Three months ended December 31,
      2024   2024   2023
        Interest Average     Interest Average     Interest Average
      Average Income or Yield/   Average Income or Yield/   Average Income or Yield/
      Balance Expense Rate   Balance Expense Rate   Balance Expense Rate
    ASSETS (Dollars in thousands)
    Interest earning assets:                      
    Loans (1,2) $ 5,543,215   $ 111,596     8.01 %   $ 5,459,842   $ 114,112     8.31 %   $ 5,127,935   $ 107,709     8.33 %
    Investment securities (3)   350,732     3,566     4.04 %     356,590     3,610     4.03 %     349,863     3,335     3.78 %
    Federal funds sold   20,172     249     4.91 %     20,164     280     5.52 %     20,028     282     5.58 %
    Other earning assets   874,368     10,546     4.80 %     848,170     11,521     5.40 %     1,001,643     13,739     5.44 %
    Total interest earning assets   6,788,487     125,957     7.38 %     6,684,766     129,523     7.71 %     6,499,469     125,065     7.63 %
    Deferred loan fees, net   (9,808 )         (10,248 )         (10,421 )    
    Allowance for credit losses on loans   (75,474 )         (72,899 )         (74,965 )    
    Noninterest earning assets:                      
    Cash and due from banks   10,626           10,826           12,376      
    Bank furniture and fixtures   8,866           9,419           9,243      
    Right of use assets   28,570           22,496           20,338      
    Other assets   169,058           173,619           171,309      
    Total assets $ 6,920,325         $ 6,817,979         $ 6,627,349      
                           
    LIABILITIES AND SHAREHOLDERS’ EQUITY                      
    Interest bearing liabilities:                      
    Deposits:                      
    Interest bearing demand and savings $ 2,076,132   $ 18,330     3.51 %   $ 2,249,260   $ 23,295     4.12 %   $ 2,139,562   $ 21,788     4.04 %
    TCD $250K or more   1,481,219     17,514     4.70 %     1,412,073     17,866     5.03 %     1,294,531     15,600     4.78 %
    Other time certificates   1,663,304     19,516     4.67 %     1,462,912     18,090     4.92 %     1,472,854     16,855     4.54 %
    Total interest bearing deposits   5,220,655     55,360     4.22 %     5,124,245     59,251     4.60 %     4,906,947     54,243     4.39 %
    Short-term borrowings   3     0     3.31 %     –     –     0.00 %     2     0     6.08 %
    Subordinated debt, net   148,434     1,325     3.55 %     148,372     1,325     3.55 %     148,194     1,325     3.55 %
    Total interest bearing liabilities   5,369,092     56,685     4.20 %     5,272,617     60,576     4.57 %     5,055,143     55,568     4.36 %
    Noninterest bearing liabilities:                      
    Demand deposits   684,472           703,982           782,766      
    Lease liability   25,486           18,882           18,179      
    Other liabilities   80,930           75,276           88,120      
    Total liabilities   6,159,980           6,070,757           5,944,208      
    Shareholders’ equity   760,345           747,222           683,141      
    Total liabilities and shareholders’ equity $ 6,920,325         $ 6,817,979         $ 6,627,349      
    Net interest income   $ 69,272         $ 68,947         $ 69,497    
    Net interest spread       3.18 %         3.14 %         3.27 %
    Net interest margin       4.06 %         4.10 %         4.24 %
                           
    Cost of Deposits:                      
    Noninterest bearing demand deposits $ 684,472         $ 703,982         $ 782,766      
    Interest bearing deposits   5,220,655     55,360     4.22 %     5,124,245     59,251     4.60 %     4,906,947     54,243     4.39 %
    Total Deposits $ 5,905,127   $ 55,360     3.73 %   $ 5,828,227   $ 59,251     4.04 %   $ 5,689,713   $ 54,243     3.78 %
    (1) Includes non-accrual loans and loans held for sale    
    (2) Net loan fee income of $1.2 million, $991,000, and $1.0 million for the quarter ended December 31, 2024, September 30, 2024 and December 31, 2023, respectively, are included in the yield computations  
    (3) Yields on securities have been adjusted to a tax-equivalent basis  
         
    PREFERRED BANK
    Year-to-Date Average Balances, Yield and Rates
    (unaudited)
                                           
      Twleve Months ended December 31,
      2024
    		   2023
        Interest Average     Interest Average
      Average Income or Yield/   Average Income or Yield/
      Balance Expense Rate   Balance Expense Rate
    ASSETS (Dollars in thousands)
    Interest earning assets:              
    Loans (1,2) $ 5,398,916   $ 445,139     8.24 %   $ 5,068,486   $ 412,505     8.14 %
    Investment securities (3)   352,416     14,257     4.05 %     389,584     14,461     3.71 %
    Federal funds sold   20,397     1,103     5.41 %     20,090     1,056     5.26 %
    Other earning assets   925,389     48,994     5.29 %     974,501     50,372     5.17 %
    Total interest earning assets   6,697,118     509,493     7.61 %     6,452,661     478,394     7.41 %
    Deferred loan fees, net   (10,301 )         (10,212 )    
    Allowance for credit losses on loans   (76,448 )         (70,992 )    
    Noninterest earning assets:              
    Cash and due from banks   10,624           11,978      
    Bank furniture and fixtures   9,537           9,010      
    Right of use assets   23,997           21,417      
    Other assets   175,725           163,828      
    Total assets $ 6,830,252         $ 6,577,690      
                   
    LIABILITIES AND SHAREHOLDERS’ EQUITY              
    Interest bearing liabilities:              
    Deposits:              
    Interest bearing demand/ savings $ 2,198,837   $ 88,274     4.01 %   $ 2,108,187   $ 75,642     3.59 %
    TCD $250K or more   1,403,663     69,176     4.93 %     1,267,859     53,200     4.20 %
    Other time certificates   1,535,880     73,718     4.80 %     1,302,847     50,653     3.89 %
    Total interest bearing deposits   5,138,380     231,168     4.50 %     4,678,893     179,495     3.84 %
    Short-term borrowings   1     0     2.50 %     1     0     3.06 %
    Advance from Federal Home Loan Bank   –     0     0.00 %     75,616     3,819     5.05 %
    Subordinated debt, net   148,344     5,300     3.57 %     148,106     5,300     3.58 %
    Total interest bearing liabilities   5,286,725     236,468     4.47 %     4,902,616     188,614     3.85 %
    Noninterest bearing liabilities:              
    Demand deposits   710,920           898,262      
    Lease liability   20,931           19,902      
    Other liabilities   79,618           84,449      
    Total liabilities   6,098,194           5,905,229      
    Shareholders’ equity   732,058           672,461      
    Total liabilities and shareholders’ equity $ 6,830,252         $ 6,577,690      
    Net interest income   $ 273,025         $ 289,780    
    Net interest spread       3.13 %         3.57 %
    Net interest margin       4.08 %         4.49 %
                   
    Cost of Deposits:              
    Noninterest bearing demand deposits $ 710,920         $ 898,262      
    Interest bearing deposits   5,138,380     231,168     4.50 %     4,678,893     179,495     3.84 %
    Total Deposits $ 5,849,300   $ 231,168     3.95 %   $ 5,577,155   $ 179,495     3.22 %
    (1) Includes non-accrual loans and loans held for sale  
    (2) Net loan fee income of $4.6 million and $4.2 million for the year ended December 31, 2024 and 2023, respectively, are included in the yield computations
    (3) Yields on securities have been adjusted to a tax-equivalent basis
         
    Preferred Bank
    Loan and Credit Quality Information
           
    Allowance For Credit Losses History
      Year ended
      December 31, 2024   December 31, 2023
      (Dollars in 000’s)
    Allowance For Credit Losses      
    Balance at Beginning of Period $ 78,355     $ 68,472  
    Charge-Offs      
    Commercial & Industrial   19,028       124  
    Total Charge-Offs   19,028       124  
           
    Recoveries      
    Commercial & Industrial   50       7  
    Total Recoveries   50       7  
           
    Net Charge-Offs   18,978       117  
    Provision for Credit Losses:   12,100       10,000  
    Balance at End of Period $ 71,477     $ 78,355  
           
    Average Loans Held for Investment $ 5,396,844     $ 5,067,870  
    Loans Held for Investment at End of Period $ 5,640,615     $ 5,273,498  
    Net Charge-Offs to Average Loans   0.35 %     0.00 %
    Allowances for Credit Losses to Loans at End of Period   1.27 %     1.49 %
           
    AT THE COMPANY: AT FINANCIAL PROFILES:
    Edward J. Czajka Jeffrey Haas
    Executive Vice President General Information
    Chief Financial Officer (310) 622-8240
    (213) 891-1188 PFBC@finprofiles.com
       

    The MIL Network –

  • MIL-OSI: Financial Institutions, Inc. Appoints Angela J. Panzarella to Board of Directors

    Source: GlobeNewswire (MIL-OSI)

    WARSAW, N.Y., Jan. 27, 2025 (GLOBE NEWSWIRE) — Financial Institutions, Inc. (NASDAQ: FISI) (the “Company”), the parent company of Five Star Bank (the “Bank”) and Courier Capital, LLC, today announced the appointment of Angela J. Panzarella as a new independent member of the Boards of Directors of both the Company and the Bank, on January 22, 2025.

    Ms. Panzarella brings extensive business and nonprofit leadership experience, including as CEO of the YWCA of Rochester and Monroe County from 2018 to 2020 and through her 20-year tenure with Bausch + Lomb, as well as prior public company board experience. During her eight years of board service to publicly-traded Transcat, Inc., a Rochester-based calibration services and equipment provider, she served as Chair of the Compensation Committee and as a member of the Technology and Governance Committees. Ms. Panzarella’s appointment increases the size of the Company’s Board to twelve members, eleven of whom are independent and three of whom were appointed within the last four years. She will serve on the Audit and Management Development & Compensation Committees.

    “We are incredibly pleased to welcome Angela Panzarella to the Boards of Directors of both Financial Institutions, Inc. and Five Star Bank,” said Susan R. Holliday, Chair of the Boards of Directors of the Company and the Bank. “Having spent the majority of her career in the highly regulated health care industry, we expect that her experience overseeing corporate strategy, financial and business operations, business development, and more, will prove to be a tremendous asset as our Company continues to execute on its long-term strategy.”

    “Angela is not only a seasoned executive with a proven ability to develop and execute successful business strategies that drive strong financial outcomes, often on a global scale, but a respected leader in the Greater Rochester community, a key growth market for us,” said Martin K. Birmingham, President, CEO and Director of the Company and the Bank. “As we continue to grow and evolve as a company, we look forward to benefitting from her perspective and counsel.”

    Prior to joining the YWCA, Ms. Panzarella served as President of ACM Medical Laboratory, Inc., a leader in clinical and global central laboratory services. From 1988 to 2008, she held a variety of executive and legal roles at Bausch + Lomb, most recently as President of the Canada and Latin American Division and Corporate Vice President of Global Vision Care. She began her career as an attorney with Harris Beach PLLC.

    Active in the community, Ms. Panzarella previously served on the boards of directors for UR Medicine Home Care and the United Way of Greater Rochester. She earned her B.A. from St. John Fisher College and J.D. from the Albany Law School of Union University.

    About Financial Institutions, Inc.
    Financial Institutions, Inc. (NASDAQ: FISI) is a financial holding company with approximately $6.2 billion in assets offering banking and wealth management products and services. Its Five Star Bank subsidiary provides consumer and commercial banking and lending services to individuals, municipalities and businesses through banking locations spanning Western and Central New York and a commercial loan production office serving the Mid-Atlantic region. Courier Capital, LLC offers customized investment management, financial planning and consulting services to individuals and families, businesses, institutions, non-profits and retirement plans. Learn more at Five-StarBank.com and FISI-Investors.com.

    Safe Harbor Statement
    This press release may contain forward-looking statements as defined by Section 21E of the Securities Exchange Act of 1934, as amended, that involve significant risks and uncertainties. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as “believe,” “anticipate,” “continue,” “estimate,” “expect,” “focus,” “forecast,” “intend,” “may,” “plan,” “preliminary,” “should,” “target” or “will.” Statements herein are based on certain assumptions and analyses by the Company and factors it believes are appropriate in the circumstances. Actual results could differ materially from those contained in or implied by such statements for a variety of reasons including, but not limited to: additional information regarding the deposit fraudulent activity; changes in interest rates; inflation; changes in deposit flows and the cost and availability of funds; the Company’s ability to implement its strategic plan, including by expanding its commercial lending footprint and integrating its acquisitions; whether the Company experiences greater credit losses than expected; whether the Company experiences breaches of its, or third party, information systems; the attitudes and preferences of the Company’s customers; legal and regulatory proceedings and related matters, including any action described in our reports filed with the SEC, could adversely affect us and the banking industry in general; the competitive environment; fluctuations in the fair value of securities in its investment portfolio; changes in the regulatory environment and the Company’s compliance with regulatory requirements; and general economic and credit market conditions nationally and regionally; and the macroeconomic volatility related to the impact of a pandemic or global political unrest. Consequently, all forward-looking statements made herein are qualified by these cautionary statements and the cautionary language and risk factors included in the Company’s Annual Report on Form 10-K, its Quarterly Reports on Form 10-Q and other documents filed with the SEC. Except as required by law, the Company undertakes no obligation to revise these statements following the date of this press release.

    For additional information contact:
    Kate Croft
    Director of Investor and External Relations
    (716) 817-5159
    klcroft@five-starbank.com

    A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/fd49cdb2-c77b-4d34-9745-23f9029a6398

    The MIL Network –

  • MIL-OSI USA: Wyden Joins Bipartisan Legislation to Support Firefighters with Service-Related Cancers

    US Senate News:

    Source: United States Senator Ron Wyden (D-Ore)
    January 27, 2025
    Washington, D.C. – U.S. Senator Ron Wyden said today that he joined the reintroduction of legislation that would expand access to federal support for the families of firefighters and other first responders who died or became permanently disabled from service-related cancers. 
    The Honoring Our Fallen Heroes Act would also extend disability benefits in cases where these first responders become permanently and totally disabled due to cancer.
    “In the wake of record wildfires last year in Oregon and California’s current wildfires, we have seen firefighters and first responders work tirelessly around the clock to save lives,” Wyden said. “They put their health, safety, and lives on the line without receiving an ounce of support that comes with the long-term risks of fighting fires. Let’s give these everyday heroes and their families the help they deserve so they don’t have to shoulder these challenges alone.”
    Currently, firefighters are only eligible for support under the Public Safety Officer Benefits (PSOB) program for physical injuries sustained in the line-of-duty, or for deaths from duty-related heart attacks, strokes, mental health conditions such as post-traumatic stress disorder, and 9/11 related illnesses.
    The PSOB program provides benefits to the survivors of fire fighters; law enforcement officers; and other first responders killed as the result of injuries sustained in the line of duty. The program also provides disability benefits where first responders become permanently or totally disabled. The Public Safety Officers’ Educational Assistance (PSOEA) program, a component of the PSOB program, provides higher-education assistance to the children and spouses of public safety officers killed or permanently disabled in the line of duty. The Department of Justice’s Bureau of Justice Assistance administers the PSOB and PSOEA programs.
    In addition to Wyden, the legislation is led by U.S. Senators Amy Klobuchar, D-Minn., and Kevin Cramer, R-N.D., and cosponsored by Senators Jim Banks, R-Ind., John Barrasso, R-Wyo., Marsha Blackburn, R-Tenn., Richard Blumenthal, D-Conn., Chris Coons, D-Del., John Cornyn, R-Texas, Ted Cruz, R-Texas, Tammy Duckworth, D-Ill., Dick Durbin, D-Ill., John Fetterman, D-Pa., Deb Fischer, R-Neb., Lindsey Graham, R-S.C., Mazie Hirono, D-Hawai’i, John Hoeven, R-N.D., Jim Justice, R-W. Va., Mark Kelly, D-Ariz., Edward J. Markey, D-Mass., Alex Padilla, D-Calif., Mike Rounds, R-S.D., Adam Schiff, D-Calif., Jeanne Shaheen, D-N.H., Tim Sheehy, R-Mont., Tina Smith, D-Minn., Mark Warner, D-Va., Elizabeth Warren, D-Mass., Peter Welch, D-Vt., and Sheldon Whitehouse, D-R.I.
    The legislation is endorsed by the International Association of Fire Fighters, as well as the Association of State Criminal Investigative Agencies; Congressional Fire Services Institute; Federal Law Enforcement Officers Association; Fraternal Order of Police; International Association of Fire Chiefs; Major County Sheriffs of America; Metropolitan Fire Chiefs Association; National Association of Police Organizations; National Fallen Firefighters Foundation; National Fire Protection Association; National Narcotics Officers’ Associations’ Coalition; National Volunteer Fire Council; and Sergeants Benevolent Association of the New York Police Department. 

    MIL OSI USA News –

  • MIL-OSI Europe: Draft agenda – Monday, 10 February 2025 – Strasbourg

    Source: European Parliament

    17 European Central Bank – annual report 2024
    Anouk Van Brug (A10-0003/2025) 
        – Amendments Wednesday, 5 February 2025, 13:00
    Texts put to the vote on Tuesday Friday, 7 February 2025, 12:00
    Texts put to the vote on Wednesday Monday, 10 February 2025, 19:00
    Texts put to the vote on Thursday Tuesday, 11 February 2025, 19:00
    Motions for resolutions concerning debates on cases of breaches of human rights, democracy and the rule of law (Rule 150) Wednesday, 12 February 2025, 19:00

    MIL OSI Europe News –

  • MIL-OSI Europe: Netherlands: Samotics secures €20 million EIB financing to accelerate the transformation of industrial efficiency and reliability with AI

    Source: European Investment Bank

    • Dutch-based leader in electrical data analytics for condition and energy efficiency monitoring signs €20 million financing with European Investment Bank.
    • Samotics will use the funds to accelerate the research and development on its technology, which can boost reliability and energy efficiency in electrical motors using AI.
    • The EIB financing is supported by the European Commission under its InvestEU initiative.

    Dutch-based electrical data analytics company Samotics has signed a €20 million financing agreement with the European Investment Bank (EIB) to accelerate its research and development activities. The EIB’s investment will enhance the company’s solutions regarding the monitoring of machine health and energy efficiency, while accelerating work on its next-generation integrated solution, planned for launch this year. The funding aligns with Samotics’ mission to make industries more reliable, efficient, and sustainable.

    The EIB Group wants to accelerate digitalisation and innovation in Industry 4.0 related technology, such as artificial intelligence and microchips, as this kind of innovation is key to Europe’s green and digital transitions, and crucial in ensuring its technological and strategic autonomy. Reliability and energy efficiency are instrumental for Europe’s public and private efforts for decarbonisation and sustainability across different sectors. The EIB’s financing benefits from the backing of the “Future Tech” guarantee within the InvestEU initiative of the European Commission.

    “This is one those applications where the use of artificial intelligence can really make a difference.“ stated EIB Vice President Robert de Groot. “It highlights that modern challenges require modern solutions, and this intelligent way to pre-empting problems and optimising energy efficiency is an important element in our decarbonisation journey. As part of our commitment to supporting technology and innovations critical for Europe’s competitiveness, we are proud to back Samotics.”.

    “This funding from the EIB highlights the trust placed in our technology and its potential to revolutionise industrial reliability and sustainability. It’s a defining moment for Samotics as we further accelerate our growth and innovation journey,” said Jasper Hoogeweegen, CEO of Samotics.

    The electrical signature analysis (ESA) that Samotics technology applies, relies on the principle that subtle changes in the operational characteristics of an electrical motor, often occurring before a failure, impact the machine’s magnetic field. This affects the supply voltage and operating current, and by using various analytical techniques, ESA provides a comprehensive overview of the entire powertrain, from motor to transmission to load, to accurately predict faults.

    Samotics’ system specifically focuses on AI driven monitoring and analysis to predict malfunctioning, detect energy inefficiencies and provide actionable recommendations. The system can be installed directly in the electric cabinet, avoiding the need to access the often-inaccessible motors. The predictive analytics for malfunction detection are vital, as these motors typically support critical infrastructure where unplanned downtime is unacceptable, and the costs of complete failure are high. Additionally, identifying and correcting energy inefficiencies can significantly reduce operating costs.

    Background information:

    The European Investment Bank (EIB) is the long-term lending institution of the European Union, owned by its Member States. The Netherlands owns a 5,2% share of the EIB. It makes long-term finance available for sound investment in order to contribute towards EU policy goals and national priorities. More than 90% of its activity is in Europe. Over the last ten years, the EIB has made available more than €27 billion in financing for Dutch projects in various sectors, including research & development, sustainable mobility, drinking water, healthcare and SMEs. The EIB will announce its 2024 annual figures on January 30th 2025.

    The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investment for EU policy priorities, such as the European Green Deal and the digital transition. InvestEU brings together under one roof the multitude of EU financial instruments previously available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is deployed through implementing partners who will invest in projects using the EU budget guarantee of €26.2 billion. The entire budget guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.

    Samotics is a leading company in electrical data analytics for condition and energy efficiency monitoring. It has developed a predictive maintenance and energy efficiency optimisation solution for industrial companies based on Electrical Signature Analysis. The company’s system specifically focuses on monitoring and analysing electric motors to detect energy inefficiencies and predict malfunctioning through Artificial Intelligence driven recommendations.

    MIL OSI Europe News –

  • MIL-OSI USA: ICYMI—Hagerty Joins Mornings With Maria on Fox Business to Discuss Trump’s Cabinet Nominees, Agenda

    US Senate News:

    Source: United States Senator for Tennessee Bill Hagerty
    NASHVILLE, TN—United States Senator Bill Hagerty (R-TN), a member of the Senate Appropriations, Banking, and Foreign Relations Committees and former U.S. Ambassador to Japan, today joined Mornings With Maria on Fox Business to discuss Senate Republicans’ role in confirming President Donald Trump’s cabinet nominations and implementing his legislative agenda.

    *Click the photo above or here to watch*
    Partial Transcript
    Hagerty on the politically-motivated delay of Trump’s cabinet confirmations: “What we’ve seen is the minority is using every procedural trick in the book. They tried to slow us down dramatically. We would’ve been much further along, even in Trump’s first term, clearly in [former President Barack] Obama’s first term. In Obama’s first term, we had twelve cabinet members seated in the first fifteen days. What we saw happen back in Trump’s first term was the resistance movement unfold against us. The Democrats plied all these procedural measures, slowed us down dramatically. We returned the favor in [former President] Joe Biden’s Administration. [Senate Majority Leader] John Thune offered to move back to a more normal sequence, as we [did with] Obama. The Democrats have no interest in it—we’ve gone through massive political gyrations—but we’re going to push these nominees through. That’s why we were here, willing to go through the night and early Sunday morning. The Democrats finally came to an 11th hour agreement to let us move Scott Bessent later today. But we’re going to keep pushing these through, grinding these through. There is no reason to be slowing all of this down, particularly when you think about the national security crises that we face as a nation. The American public wants us to get to work. They expect President Trump to be on the case. The Democrats are, yet again, doing everything they can to slow things down and throw sand into the gears.”
    Hagerty on his strong support for Pam Bondi: “Pam Bondi is a top priority nominee for us. She will get confirmed; there’s no question about that. Getting Pam and getting Kash Patel into position to deal with the national security crises and threats that we face here domestically is absolutely critical. She’s high priority. She’s in this first wave that will go—she will go—and I have every reason to expect she’ll go on a bipartisan basis. We’ve just got to get the Democrats to realize this and start to work with us more closely. The American public expect it.”
    Hagerty on the reconciliation process: “What we need to do is get as many things accomplished as quickly as we possibly can. Look, the situation in Florida is urgent. It makes sense to put it on a piece of legislation that’s moving through quickly. That’s certainly going to help us bring along various Florida members. I think that should be part and parcel of this. And if you just step back for a minute and think about where America saw this country in November of this last year, seventy-five percent of Americans said we were on the wrong track as a nation. Maria, the American people voted. President Trump won every single battleground state a landslide in the electoral college. He won the popular vote. Democrats should wake up and realize the public needs us to make significant change. These are the vehicles that will allow those changes to occur, I hope we’ll get their support.”
    Hagerty on Trump’s agenda to bring back American sovereignty: “Senator Thune certainly is focused on the process that we’re going to be moving through right now, to make certain that our military is adequately funded. But I’ve had great conversations with Elon Musk about what we can do, from an operational efficiency standpoint, deploying new technologies, making certain that the most relevant technologies that are available in the private sector are being deployed in our military. The focus is going to be back on lethality and effectiveness, not on pronouns at the Pentagon. Now [Secretary] Pete [Hegseth], he has got that message loud and clear. I’m excited about what may come, in terms of deploying new technologies, new ways to make America’s warfighters the most lethal in the world. So, I think the combination of the ongoing effort that we’ve got from a legislative standpoint, plus the operational efforts that are taking place with the Department of Government Efficiency, need to come to bear, in full force, and our procurement exercises in the Department of Defense, making certain that we have our men and women in the military in as great a position as we possibly can to deliver for the American people.”
    Hagerty on the national security concerns in doing business with the CCP: “I think there’s so much that can be done regarding China accessing our capital markets. Maria, one of my pet peeves is allowing Chinese companies that have golden share arrangements to list on our capital markets. You know what golden share is? That’s a minority stake that the Chinese government, the CCP has control of, that can actually be a veto for any corporate action that one might take. They have this control over Bytedance. They have this sort of control over Tencent. It’s amazing that these companies are allowed to list here. The American public does not understand the extent of control that the Chinese Communist Party has over their champion industries, yet they’re allowed to come here, take capital from our markets, the most efficient capital markets in the world, in a situation that is entirely unfair. When you think about it from a corporate governance standpoint, there are many ways, I think, that Scott Bessent can look at these critical issues and I hope address them very quickly.”
    Hagerty on the debt ceiling: “President Trump wants the debt ceiling dealt with as quickly as possible. In the past, it’s always been used by the Democrats as a cudgel to force actually more spending. We could deal with this in a number of fashions, perhaps dealing with it alongside disaster relief for California or others. But we need to deal with it right up front, quickly and effectively, and not let this become an issue or a hurdle to get larger things accomplished.”

    MIL OSI USA News –

  • MIL-OSI USA: 01.23.2025 Cruz, Daines, Leader Thune, GOP Colleagues Introduce Bill to Give Small Businesses Permanent Tax Break

    US Senate News:

    Source: United States Senator for Texas Ted Cruz
    WASHINGTON, D.C. – U.S. Sens. Ted Cruz (R-Texas), Steve Daines (R-Mont.), Majority Leader John Thune (R-S.D.), and 37 additional Republican Senators introduced the “Main Street Tax Certainty Act.” This bill would make the 20-percent pass-through business tax deduction permanent.
    Upon introduction, Sen. Cruz said, “Small businesses are the backbone of our economy, providing jobs and opportunities for millions of families across Texas and America. With Biden’s catastrophic inflation continuing to burden hardworking Americans, the last thing they need is a massive tax hike. Making the 20-percent pass-through deduction permanent is essential to ensuring our small businesses can prosper, expand, and keep our nation strong. I’m proud to support the ‘Main Street Tax Certainty Act’ and will continue fighting to protect small businesses.”
    Sen. Daines said, “As the son of a contractor, I’ve seen firsthand the hard work it takes to keep a small business flourishing- especially as Americans are still grappling with the effects of Joe Biden’s inflation. It’s absolutely crucial that we pass this legislation to prevent a 20 percent tax increase for hardworking Montanans and I’ll keep fighting for ways to support Montana small businesses, which provide the majority of jobs in our state.”
    Sen. Thune said, “Small businesses are the economic engine that drive growth and jobs in South Dakota and across our country. This legislation is critical to permanently extending a key provision from the Tax Cuts and Jobs Act and ensuring our small businesses and farms and ranches are not hit with a crippling tax hike at the end of 2025.”
    The legislation was also co-sponsored by Sens. John Barrasso (R-Wyo.), Shelley Moore Capito (R-W.V.), James Lankford (R-Okla.), Joni Ernst (R-Iowa), Tom Cotton (R-Ark.), Tim Scott (R-S.C.), Chuck Grassley (R-Iowa), Kevin Cramer (R-N.D.), Jerry Moran (R-Kan.), Marsha Blackburn (R-Tenn.), Mike Rounds (R-S.D.), Pete Ricketts (R-Neb.), Katie Britt (R-Ala.), Jim Risch (R-Idaho), Eric Schmitt (R-Mo.), Roger Wicker (R-Miss.), Cynthia Lummis (R-Wyo.), Cindy Hyde-Smith (R-Miss.), Tommy Tuberville (R-Ala.), John Hoeven (R-N.D.), Thom Tillis (R-N.C.), Roger Marshall (R-Kan.), Jim Justice (R-W.V.), Tim Sheehy (R-Mont.), Deb Fischer (R-Neb.), Bill Cassidy (R-La.), Ted Budd (R-N.C.), Rick Scott (R-Fla.), Bill Hagerty (R-Tenn.), Todd Young (R-Ind.), John Kennedy (R-La.) and Jim Banks (R-Ind.), John Curtis (R-Utah), Dan Sullivan (R-Alaska), Lindsey Graham (R-S.C.), Bernie Moreno (R-Ohio), John Boozman (R-Ark.).
    Read the bill text here.
    BACKGROUND
    The 20-percent small business deduction, section 199A, was created as a part of President Trump’s 2017 tax cuts to level the playing field between small businesses and corporations. Without Congressional action, it will expire at the end of 2025, causing 9 out of 10 small businesses to incur a significant tax hike. This legislation is endorsed by the National Association of Manufacturers, National Federation of Independent Business, and over 230 trade associations.

    MIL OSI USA News –

  • MIL-OSI Asia-Pac: RDCL, a Residential Mortgage-Backed Securitisation (RMBS) Company set up by NHB receives Certificate of Registration to commence Operations from RBI

    Source: Government of India (2)

    RDCL, a Residential Mortgage-Backed Securitisation (RMBS) Company set up by NHB receives Certificate of Registration to commence Operations from RBI

    RDCL will facilitate growth of residential mortgage financing by providing investment avenues to long term institutional investors

    Posted On: 27 JAN 2025 8:18PM by PIB Delhi

    National Housing Bank (NHB), a statutory body under the Government of India has set up, RMBS Development Company Limited, as the single largest shareholder and supported by a strong mix of investor classes across Banks, HFC/ NBFC and Insurance company.

    RDCL has now received Certificate of Registration (CoR) to commence operations from the Reserve Bank of India (RBI) on January 23, 2025.

    The Company is envisioned to play the role of a commercially sustainable market intermediary to facilitate the growth and development of Residential Mortgage-Backed Securitisation (RMBS) market in the country. The operationalization of Company will provide investment avenues to long term institutional investors viz., Insurance Companies, Pension and Provident Funds in the RMBS market. The diverse set of investors shall instil confidence in the ecosystem and bring valuable experience in RMBS market development.

    As part of its key business activities, the Company will invest in RMBS issuances, extend second loss credit enhancements, support liquidity, promote standard process and documentation and other related activities for market development.

    A well-developed RMBS market can emerge as a reliable complement to existing sources of funding and liquidity for Primary Lending Institutions. During the last 5 years, individual housing loans outstanding have grown from ₹ 17.95 Lakh Crore as on March 31, 2019 to ₹ 33.19 Lakh Crore as on 31st March 2024 with a CAGR of 13.1% and this growth is expected to continue.

    The paid-up Capital of the Company is ₹500 crore with its Registered Office at Mumbai. The Company is expected to commence operations in March, 2025.

    *******

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    MIL OSI Asia Pacific News –

  • MIL-OSI Global: Donald Trump’s suggestion of ‘clearing out’ Gaza adds another risk to an already fragile ceasefire

    Source: The Conversation – UK – By Karin Aggestam, Professor of Political Science, CMES Director, Lund University

    Donald Trump’s recent statement describing Gaza as a “demolition site” – and his suggestion to “evacuate” Palestinians in Gaza to Egypt and Jordan to “clean out that whole thing” – has sent shockwaves across the region.

    Trump reportedly told journalists travelling with him on Air Force One at the weekend that he had spoken with King Abdullah of Jordan and planned to talk with Egypt’s president, Abdel Fattah el-Sisi. “You’re talking about probably a million and a half people, and we just clean out that whole thing,” he said.

    He added that relocating Palestinian civilians to “some of the Arab nations, and build[ing] housing in a different location, where they can maybe live in peace for a change” could be “done temporarily or could be long term”.

    Israel’s extreme ultra-nationalist parties, both in and outside of the Israeli government, are thrilled by the idea. It’s one they have long advocated.

    But it has been widely criticised across the region as a potential “second Nakba” – referring to the violence and displacement of Palestinians after Israel’s unilateral declaration of statehood in 1948. The proposal has also been outright rejected by Egypt and Jordan. It has also been strongly condemned by the Palestinians.

    It remains unclear to what extent this aligns with US policy and diplomacy, but such rhetoric risks undermining the pivotal regional diplomatic efforts. These efforts, led by Qatar and Egypt in close coordination with Washington, are focused on continuing the negotiations on the ceasefire, monitoring progress, and verifying compliance.

    So it’s far from certain if this is an official US policy position or another example of the US president simply airing his thoughts. But what is clear is that his latest pronouncement will further complicate the ceasefire deal agreed on January 17.

    The deal already faces significant challenges and uncertainties, not least the mutual distrust between the Israeli and Palestinian leaderships. History tells us that this lack of trust has developed, in part, because of the numerous times ceasefires have been used for purposes other than pursuing long-term settlement, such as opportunities to regroup, rearm or reposition strategically.

    So the staged nature of the current deal carries considerable risks, as it creates opportunities for “spoilers” on both sides to derail the process. The recent violence of Jewish settlers on the West Bank and Hamas’s active encouragement of confrontation there are other examples of things that could derail the ceasefire.

    The negotiation process is further complicated by dynamics tied to the political survival of Israel’s prime minister, Benjamin Netanyahu. One party (Jewish Power) has already left his coalition government in protest against the ceasefire. Meanwhile the leader of the Religious Zionist party, Bezalel Smotrich, has threatened to do the same if the military operation against Hamas is not resumed.

    Hamas, in turn, has attempted to reassert its control in Gaza. We’ve seen examples of that during the hostage exchange process when Hamas fighters conspicuously present at the handovers. Hamas may have been severely weakened, but it still controls significant parts of Gaza’s bureaucracy and policing and wants the world to know it.

    Challenges ahead

    If any part of the agreement falters there is a substantial risk that each side will blame the other of breaching the terms of the ceasefire. Two of the most contentious issues in the second phase are determining who will govern Gaza and how to implement a full Israeli withdrawal.

    While Israel continues its security cooperation with the Palestinian Authority (PA) in the West Bank, it vehemently opposes any PA role in Gaza. There is also considerable doubt as to whether Israel will agree to any long-term solution which involves complete withdrawal of the Israel Defense Forces (IDF) from Gaza.

    The recent resignation of the IDF’s chief of staff Herzl Halevi, as he took responsibility for the IDF’s failures on October 7, has further destabilised the political and military dynamics in Israel. A lot will depend on his successor.



    Read more:
    Donald Trump’s presidency presents Benjamin Netanyahu with a crisis that could be existential – here’s why

    Transactional diplomacy

    Recent geopolitical shifts have reshaped regional dynamics. This presents challenges and opportunities for any diplomatic initiatives surrounding Israel and Palestine. The weakening of Iran’s so-called “axis of resistance”, including Hamas in Gaza and Hezbollah in neighbouring Lebanon – and the now-collapsed Assad regime in Syria – may provide an opportunity for the normalisation of relations between Israel and Saudi Arabia.

    This in turn will offer an opportunity to reshape the Middle East’s geopolitical landscape. This potential breakthrough builds on the Abraham accords, which was one of Trump’s foreign policy initiatives. It’s a transactional approach to diplomacy, which prioritises pragmatic and results-oriented negotiations.

    The new US Middle East envoy, former real estate developer Steve Witkoff, has emphasised “courageous diplomacy”, as well as strong leadership and what he called “reciprocal actions” from the parties to the peace deal. Whether the new US administration will revive the 2020 Trump plan for a Palestinian state remains uncertain.

    That plan proposed granting 70% of the West Bank and Gaza to Palestinians while allowing Israel to retain sovereignty over Jerusalem. It also included US approval for Israeli annexation of territories with Jewish settlements in the West Bank.

    For Israel, normalisation with Saudi Arabia would be a major diplomatic victory. Washington is playing a crucial role here, offering incentives such as sale of advanced American weapons systems to Riyadh. But Saudi Arabia has reportedly demanded concrete steps toward establishing a Palestinian state as part of the deal. Trump’s latest gambit, if it becomes official US policy, would make that a non-starter.

    Karin Aggestam has received research funding from Riksbankens Jubileumsfond, Australian Reseach Council, Wallenberg Foundation and others.

    – ref. Donald Trump’s suggestion of ‘clearing out’ Gaza adds another risk to an already fragile ceasefire – https://theconversation.com/donald-trumps-suggestion-of-clearing-out-gaza-adds-another-risk-to-an-already-fragile-ceasefire-248334

    MIL OSI – Global Reports –

  • MIL-OSI Global: What Davos delegates missed when they discussed green finance for business

    Source: The Conversation – UK – By Michael Harrison, Senior Lecturer in Economics and Finance, University of East London

    Addressing the climate crisis was one of the key themes at the World Economic Forum in Davos. Rustam Zagidullin/Shutterstock

    Every year, leaders from politics and business come together with economists, investors and even celebrities at the World Economic Forum in the Swiss resort of Davos. One of the five key themes of this year’s event was safeguarding the planet. The forum’s own figures suggest that human-caused climate change has cost the planet US$3.6 trillion (£2.9 trillion) in damage since 2000 alone.

    Many of the sessions at Davos focused on climate change, which was especially pertinent after US president Donald Trump’s decision to abandon for a second time the Paris Agreement – a framework to keep the warming of the planet to 1.5°C above pre-industrial levels by the end of the century.

    In an online address to Davos delegates, Trump even argued that the oil-producers’ group Opec should reduce the price of oil. This is in stark contrast to the views of many other governments – exemplified by UK energy and climate change secretary Ed Miliband’s assertion that net zero is “unstoppable”.

    But one of the less discussed elements of the path to net-zero by the year 2050 (a key target to keep the Paris Agreement on track) is the role of the financial sector.

    As economists, we believe that banks and financial institutions should play a key role in making the green transition happen. Companies that produce goods and services will need to invest in equipment and technology – either to make new greener products or to ensure that they pollute less.

    But this will cost money – likely money that firms do not actually have on their balance sheet or under their mattress. When banks assist in providing funding for this type of investment, it is known as green finance.

    Green finance from banks can take two forms. Either the banks underwrite corporate bonds, which means they sell bonds to investors in exchange for a fee. Or they become involved in the provision of a syndicated loan, which is when they collaborate with other banks to lend money.

    But both options are constrained by the rule that a bank will only provide finance out of self-interest. This means they act only when the profit they earn is proportional to the credit risk they take on. But this was in contrast to the message from Davos that businesses should take the lead, with the aid of finance from banks, in mitigating the risks of climate change.

    With easier access to finance, more firms could invest in innovative ways to go green like this car park with inbuilt solar panels in Leeds.
    Clare Louise Jackson/Shutterstock

    Sources of credit for businesses to make green investments include philanthropists, public finance and the private sector (that is, commercial banks). However, it is arguable that charity and public money are best used in partnership with private banks, to finance projects that are perceived high risk and low return. Banks alone would not support these because of their promotion of self-interest.

    However, philanthropy can be limited and inconsistent in providing funds for green projects. And the public sector has so many demands on its purse that its ability to support is also limited. This is where the private sector plays a key role in mitigating climate change and where partnerships between these three sectors could offer a way forward.

    This pathway was discussed at Davos but the speakers were not clear on what effective partnerships would look like. As academics who have researched the factors that influence green finance provision across multiple European countries, we would suggest a partnership structure between the public sector and the private sector, based on risk-sharing.

    In these cases where banks perceive the risk to be unbearable (and therefore not in their self-interest), governments could partner with banks in offering finance and so share the consequences of a bad project outcome. In other words, they would form a partnership with the bank to share the downside risk.

    A bank may consider an investment to be higher risk where a project has less certain outcomes, or requires funding for a longer period of time. Both of these factors are comparatively common in green financing deals. This could be because a firm is investing in new or untested tech or production methods – for example car manufacturers exploring new electric vehicle battery technologies.

    The struggle for smaller businesses

    This partnership approach could especially benefit small and medium-sized enterprises (SMEs), which make up 99% of Europe’s companies. But these businesses can struggle to access finance from banks due to their lack of capital, which can make banks see them as a high risk. And this of course is challenging for SMEs, which mostly have no other sources of external finance.

    Research shows that medium-sized firms often rely on loans for finance. Our work focuses on how companies in Europe and the UK source green financing. It has highlighted that larger companies, as well as more liquid and more profitable firms, tend to raise finance via bonds (issued by banks and bought by investors) rather than loans (from a bank or other financial institution).

    In fact, our research shows that in some European countries (including Latvia, Malta and Romania), domestic banks have no record whatsoever of providing green finance to companies.

    This means it is much easier for larger businesses to get green finance compared to their smaller peers. And smaller companies tend to obtain relatively lower amounts of green financing, creating a real risk that SMEs may not get what they need in order to play their part in reducing their emissions.

    Without a significant shift in allowing SMEs to get the finance they need to become greener, governments will struggle to get close to their net-zero goals. But, along with financial regulators, governments could lead the way to create partnerships with banks and other financial institutions to overcome the barriers that SMEs face.

    Sharing the risk would ensure banks continue their green lending activities and accelerate progress toward meeting government climate targets.

    The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.

    – ref. What Davos delegates missed when they discussed green finance for business – https://theconversation.com/what-davos-delegates-missed-when-they-discussed-green-finance-for-business-248208

    MIL OSI – Global Reports –

  • MIL-OSI Australia: Australian Open 2025 serves up a grand slam for Melbourne’s economy

    Source: National Australia Bank

    Record-breaking crowds at the Australian Open have served up a welcome spending boost to Melbourne’s economy with accommodation the big winner over the last fortnight.

    International tourists and domestic visitors booked out hotels, motels and serviced apartments, spending more than $111 million on accommodation across Melbourne. Accommodation group Ascott Australasia highlighted a 16% jump in demand during the 2025 tournament.

    Transaction data from Australia’s largest business bank, NAB, reveals a grand slam in consumer spending over the fortnight:

    • More than $275 million was spent at Melbourne’s pubs, bars and restaurants over the fortnight.
    • Melbourne’s bars experienced a 3% uplift in spending compared to the 2024 Australian Open.
    • Businesses immediately surrounding the Melbourne Park precinct experienced a $74 million spending injection, up 2% on last year.
    • Clothing and apparel spending at businesses surrounding Melbourne Park was up by 3% year on year.

    NAB Business Banking Executive Julie Rynski said the Australian Open’s marquee event status drove positive economic benefits across the inner city and surrounds.

    “Visitors from interstate and overseas flock to Melbourne for the tennis and take the opportunity to enjoy the best of the city’s vibrant culinary and cultural scene over the fortnight,” Ms Rynski said.

    “We’re seeing crowd records broken and consumer spending growing year-on-year, cementing the event’s status as an all-important launchpad for businesses into the year ahead.

    “The continued growth in spending translates to a real vibe which you can see and feel with booked out eateries and hotels, packed pubs and bars, lines for take away coffee and busier taxis and public transport.

    “Major events like the Australian Open not only generate direct spending but also create a ripple effect with flow through benefits for the wider economy, retailers, transport services and tourism operators.

    “This is a welcome boost to businesses given cost-of-living concerns. It’s clear people are making thoughtful spending changes through the year to save up, visit Melbourne and enjoy the city and the tennis,” Ms Rynski said.

    Managing Director, Ascott Australasia and Chair of Accommodation Australia David Mansfield said the tournament was a boom for accommodation providers.

    “The Australian Open has once again proven to be a transformative event for Melbourne’s hospitality and accommodation sectors, driving occupancy rates to record levels and surpassing the strong demand seen in previous years,” Mr Mansfield said.

    Ascott’s Melbourne properties which include Quest Apartment Hotels, Citadines on Bourke, Oakwood Premier, and lyf Collingwood experienced a significant 16% increase in demand during this year’s tournament. Additionally, revenue per available room (RevPAR) saw a 13% increase compared to 2024, underscoring the event’s growing significance in driving revenue for the accommodation sector.

    “The Australian Open doesn’t just fill hotels; it powers the entire tourism ecosystem. Every visitor who arrives in Melbourne spends on local bars, restaurants, attractions, and small businesses,” Mr Mansfield said.

    “For the accommodation industry specifically, the event has highlighted the vital role our sector plays in supporting large-scale tourism and economic growth.

    “As Chair of Accommodation Australia, I am thrilled to see how events like the Australian Open highlight the resilience, importance, and potential of the hospitality and tourism sectors.

    “With each passing year, the Australian Open continues to grow in scale and influence. Its success reminds us of the importance of ongoing investment destination marketing, infrastructure, workforce development, and collaborative efforts between industry and government to ensure the tourism and accommodation sectors thrive well into the future,” Mr Mansfield said.

    Notes to editors

    • * Estimates taken from spend at NAB merchant terminals surrounding Melbourne Park and across Melbourne between 12 January and 26 January 2025.
    • Pre-settlement data has been used to indicate trends and % movements. Final, exact figures are subject to change.

    MIL OSI News –

  • MIL-OSI: Kvika banki hf.: The Central Bank of Iceland Resolution Authority approves a resolution plan for Kvika banki and sets the minimum requirement for own funds and eligible liabilities (MREL)

    Source: GlobeNewswire (MIL-OSI)

    The Central Bank of Iceland Resolution Authority announced today that a resolution plan for Kvika has been approved and thereby a decision on the minimum requirement for own funds and eligible liabilities (MREL) for the bank, in accordance with the Act on Resolution of Credit Institutions and Investment Firms, no. 70/2020. 

    According to the Resolution Authority’s decision, Kvika’s MREL requirements are 22.0% of Total Risk Exposure Amount (MREL-TREA) and 6.0% of Total Exposure Measure (MREL-TEM). The decision is effective from the date of the announcement, and the bank is already considered to meet the MREL requirements.  

    For further information, please contact Kvika’s Investor Relations at ir@kvika.is or by phone at +354 540 3200. 

    The MIL Network –

  • MIL-OSI Russia: IMF Executive Board Concludes 2024 Article IV Consultation with Cambodia

    Source: IMF – News in Russian

    January 27, 2025

    Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with Cambodia.

    Cambodia’s economy has continued to recover, albeit at a modest pace. We project real GDP to grow from 5.5 percent in 2024 to 5.8 percent in 2025 and inflation to pick up from 0.5 percent in 2024 to 2 percent in 2025 and remain contained. However, risks to the outlook are tilted to the downside from both external factors and domestic vulnerabilities, including from policy changes by major trading partners, geoeconomic fragmentation, and continued weakness in the construction and real estate sectors.

    The recovery remains uneven. Real GDP growth is driven mainly by external demand, with a strong rebound in garment exports and high growth in agricultural exports. Tourism has experienced a structural shift in its composition, resulting in a lagged recovery in tourism receipts. Growth in non-tradable sectors remains weak. After a sustained credit expansion that lifted the credit-to-GDP ratio from 24 percent in 2010 to 135 percent in 2023, credit growth has come to a near halt. The construction and real estate sectors are undergoing a correction, with rising non-performing loans and emerging signs of private-sector debt overhang.

    We project the fiscal deficit at 2.4 percent of GDP in 2025, down from 3 percent in 2024, with a gradual fiscal consolidation envisaged in the medium-term fiscal framework. Public debt remains well-contained, staying below 30 percent of GDP over the next decade. The current account balance is projected to swing back to a deficit of 1.8 percent of GDP in 2024 as strong demand for imports outpaces the recovery in exports and tourism. The deficit is projected to increase somewhat in 2025, reaching 2.5 percent of GDP, with export growth expected to moderate. 

    Executive Board Assessment2

    Executive Directors welcomed the continuing recovery of the Cambodian economy, driven by strong growth in garment and agricultural exports, and improving tourism activity. Nonetheless, the recovery has been uneven, and while growth is expected to continue, risks to the outlook are tilted to the downside. Directors underscored the importance of policies to safeguard macro financial stability, ensure a durable and inclusive recovery, and achieve the authorities’ development goals over the medium term.

    Directors supported a neutral fiscal stance in the near term and highlighted the importance of gradual and high-quality consolidation over the medium term underpinned by sound fiscal frameworks to maintain debt sustainability and strengthen economic resilience. They welcomed the recent publication of a medium-term fiscal framework but recommended strengthening it with more conservative and transparent fiscal rules. Directors stressed the need to further mobilize revenues through rationalizing tax exemptions and implementing tax policy reforms, while enhancing spending efficiency and strengthening public investment management, in order to help rebuild fiscal buffers and safeguard priority social and capital spending. Directors welcomed efforts to foster the development of the domestic government bond market as Cambodia’s access to concessional foreign financing will be reduced when it graduates from Least Developed Country status. They also stressed the need for sound management of fiscal risks from state-owned enterprises and public-private partnerships.

    Directors supported the measured pace of monetary policy normalization while maintaining adequate financial system liquidity. They encouraged continuing efforts to modernize the monetary policy framework to enhance policy transmission and support de-dollarization. Noting the ongoing corrections in the construction and real estate sectors, declining FDI inflows, and rising nonperforming loans, Directors encouraged phasing out forbearance measures and developing a comprehensive plan to safeguard financial stability. They recommended strengthening risk-based supervision, improving macroprudential policy, enhancing coordination among financial sector supervisory agencies, and intensifying oversight of the real estate sector.

    Directors highlighted the importance of structural reforms to promote economic diversification and improve competitiveness. They encouraged the authorities’ efforts to enhance human capital, invest in infrastructure, strengthen the business environment, address climate vulnerabilities, and promote renewable energy to attract more diversified FDI. They also underscored the importance of strengthening governance and institutions, improving transparency, enhancing the AML/CFT framework, and addressing data limitations through  capacity development.

    Table 1. Cambodia: Selected Economic Indicators, 2021 – 29 1/

    Per capita GDP (2022, US$): 1,546                   Life expectancy (2019, years): 75.5

    Population (2022, million):    16.7                    Literacy rate (2019, percent):  87.7
     

    2021

    2022

    2023

    2024

    2025

    2026

    2027

    2028

    2029

    Est.

    Proj.

    Output and prices (annual percent change)

    		                  

    GDP at constant prices

    3.1

    5.1

    5.0

    5.5

    5.8

    6.2

    6.0

    6.0

    6.0

    Inflation (end-year)

    3.7

    2.9

    2.7

    1.5

    2.1

    3.2

    3.0

    3.0

    3.0

    (Annual average)

    2.9

    5.3

    2.1

    0.4

    2.1

    3.2

    3.0

    3.0

    3.0
                       

    Saving and investment balance

    (in percent of GDP)

    		                  

    Gross national saving

    0.8

    15.6

    33.6

    30.7

    30.0

    29.2

    29.2

    29.2

    29.3

    Government saving

    0.3

    3.1

    4.1

    5.1

    6.1

    7.1

    8.1

    9.1

    10.1

    Private saving

    0.5

    12.5

    29.5

    25.6

    23.9

    22.1

    21.1

    20.1

    19.2

    Gross fixed investment

    30.4

    34.6

    32.3

    32.5

    32.5

    32.5

    32.5

    32.5

    32.5

    Government investment

    6.6

    5.6

    5.8

    5.2

    4.5

    4.3

    4.2

    3.9

    3.8

    Private investment

    23.8

    29.0

    26.5

    27.4

    28.0

    28.2

    28.4

    28.6

    28.7
                       

    Money and credit (annual percent change, unless otherwise indicated)

    		                  

    Broad money

    16.4

    8.2

    12.5

    8.5

    7.9

    10.5

    11.3

    9.1

    9.0

    Private sector credit

    23.6

    18.5

    3.5

    4.0

    7.0

    10.0

    10.0

    10.0

    10.0

    Velocity of money 2/

    1.1

    1.0

    1.0

    1.0

    1.0

    1.0

    1.0

    1.0

    1.0
                       

    Public finance (in percent of GDP)

    		                  

    Revenue

    15.8

    18.1

    15.9

    14.9

    14.9

    14.9

    15.0

    15.1

    15.2

    Domestic revenue

    14.7

    16.4

    14.7

    13.7

    13.7

    13.8

    14.0

    14.1

    14.4

    Of which: Tax revenue

    13.2

    14.7

    13.0

    12.1

    12.1

    12.2

    12.3

    12.5

    12.7

    Grants

    1.1

    1.7

    1.2

    1.2

    1.1

    1.1

    1.0

    0.9

    0.8

    Expenditure

    21.0

    18.4

    18.7

    17.9

    17.3

    17.1

    17.1

    17.2

    17.1

    Expense

    14.4

    12.8

    12.9

    12.7

    12.8

    12.8

    13.0

    13.3

    13.4

    Net acquisition of nonfinancial assets

    6.6

    5.6

    5.8

    5.2

    4.5

    4.3

    4.2

    3.9

    3.8

    Net lending (+)/borrowing(-)

    -5.2

    -0.3

    -2.8

    -3.0

    -2.4

    -2.2

    -2.1

    -2.1

    -2.0

    Net lending (+)/borrowing(-) excluding grants

    -6.3

    -2.0

    -4.0

    -4.2

    -3.6

    -3.3

    -3.2

    -3.0

    -2.8

    Net acquisition of financial assets

    -3.6

    1.4

    -0.3

    -0.2

    0.5

    0.3

    0.2

    0.3

    0.4

    Net incurrence of liabilities 3/

    1.6

    1.7

    2.5

    2.8

    2.9

    2.5

    2.4

    2.4

    2.4

    Total public debt (In percent of GDP)

    25.9

    25.0

    25.7

    26.8

    27.8

    27.8

    27.8

    27.7

    27.7

    Balance of payments (in millions of dollars, unless otherwise indicated)

    		                  

    Exports, f.o.b.

    19,527

    23,175

    23,569

    26,745

    28,595

    30,942

    33,449

    36,307

    39,457

       (Annual percent change)

    5.7

    18.7

    1.7

    13.5

    6.9

    8.2

    8.1

    8.5

    8.7

    Imports, f.o.b.

    -30,726

    -31,995

    -26,553

    -31,055

    -33,244

    -35,626

    -38,605

    -41,871

    -45,434

       (Annual percent change)

    46.4

    4.1

    -17.0

    17.0

    7.0

    7.2

    8.4

    8.5

    8.5

    Current account (including official transfers)

    -10,886

    -7,572

    555

    -847

    -1,269

    -1,794

    -1,993

    -2,175

    -2,283

        (In percent of GDP)

    -29.6

    -19.0

    1.3

    -1.8

    -2.5

    -3.3

    -3.3

    -3.4

    -3.2

    Gross official reserves 4/

    20,265

    17,805

    19,998

    20,753

    23,064

    26,887

    30,951

    35,422

    40,351

        (In months of prospective imports)

    7.0

    7.3

    6.9

    6.6

    6.9

    7.4

    7.9

    8.3

    8.7
                       

    Total public debt (in millions of dollars)

    9,505

    9,971

    11,187

    12,473

    13,932

    15,218

    16,508

    17,912

    19,453

    (In percent of GDP)

    25.9

    25.0

    25.7

    26.8

    27.8

    27.8

    27.8

    27.7

    27.7

    External debt (in millions of dollars, unless                                    otherwise indicated)

    		                  

    Public external debt

    9,505

    9,971

    11,187

    12,387

    13,726

    14,939

    16,178

    17,548

    18,978

    (In percent of GDP)

    25.9

    25.0

    25.7

    26.6

    27.4

    27.3

    27.2

    27.1

    27.0

    Public debt service

    397

    427

    449

    418

    439

    458

    482

    506

    533

    (In percent of exports of goods and services)

    2.0

    1.7

    1.6

    1.3

    1.3

    1.2

    1.2

    1.2

    1.1

    Nominal effective exchange rate (index, trade partners by CPI)

    113.3

    122.4

    123.3

    …

    …

    …

    …

    …

    …

    Real effective exchange rate

    (index, based on CPI)

    125.3

    134.0

    132.4

    …

    …

    …

    …

    …

    …

    Memorandum items:

    		                  

    Nominal GDP (in billions of Riels)

    150,793

    164,059

    177,719

    190,603

    205,946

    225,291

    245,726

    267,845

    292,066

    (In millions of U.S. dollars)

    36,797

    39,838

    43,304

    46,568

    50,180

    54,745

    59,548

    64,733

    70,395

    Sources: Cambodian authorities; and IMF staff estimates and projections.

    1/ Based on the rebased GDP.

    		                

    2/ Ratio of nominal GDP to the average stock of broad money.

    		                

    3/ Includes statistical discrepancy.

    		                

    4/ Includes unrestricted foreign currency deposits held at the National Bank of Cambodia.

    		                

    [1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

    [2] At the conclusion of the discussion, the Managing Director, as Chair of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summing up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.  

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Alexander Muller

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

    https://www.imf.org/en/News/Articles/2025/01/27/pr-25017-cambodia-imf-executive-board-concludes-2024-article-iv-consultation-with-cambodia

    MIL OSI

    MIL OSI Russia News –

  • MIL-OSI: Credit Agricole SA : Crédit Agricole Personal Finance & Mobility finalizes the GAC Leasing equity project to support the growth of GAC Group’s electric vehicle sales in China

    Source: GlobeNewswire (MIL-OSI)

    Massy – January 27th, 2025

    Crédit Agricole Personal Finance & Mobility
    finalizes the GAC Leasing equity project to support the growth of GAC Group’s electric vehicle sales in China

    • CA Personal Finance & Mobility finalizes the planned acquisition of 50% of the equity interests of GAC Finance Leasing Co. Ltd. (GAC Leasing), which becomes Guangzhou GAC-Sofinco Finance Leasing Co Ltd (GAC-Sofinco Leasing), the leasing company of one of the largest Chinese manufacturers Guangzhou Automobile Group Co., Ltd. (GAC Group), via a reserved capital increase.
    • With this new joint venture, CA Personal Finance & Mobility will offer financial and operational leasing solutions on the Chinese market in 2025 and will thus promote the deployment of electric vehicles in China.
    • This transaction consolidates a partnership existing since 2009 between CA Personal Finance & Mobility and GAC Group with the creation of GAC-Sofinco AFC, a 50-50 joint venture. The latter operates throughout China and offers automotive financing and services to the GAC-Honda, GAC-Toyota, AION, HYPTEC and GAC Motor networks, serving more than 3,000 dealers.

    CA Personal Finance & Mobility becomes a 50% shareholder in GAC-Sofinco Leasing

    Following a reserved capital increase, CA Personal Finance & Mobility owns 50% of GAC-Sofinco Leasing. The company has been operating on the Chinese market since 2004 and offers financial and operational leasing solutions to GAC customers and its dealer network.

    Through this transaction, CA Personal Finance & Mobility and GAC group are strengthening the leasing offer proposed to Chinese customers, thereby stimulating the sale of electric vehicles, which already represent 60% of the leasing contracts of the new GAC-Sofinco Leasing on a portfolio of more than 200,000 vehicles.

    All necessary authorizations from competition authorities and competent regulators have been obtained. The impact on the CET1 ratio of Crédit Agricole S.A. and that of the Crédit Agricole group will be very limited. 

    « This transaction reaffirms the importance of our long-standing partnership with GAC group. It will enable us to support together and over the long term the development of the particularly dynamic electric automobile market in China. »

    Stéphane PRIAMI – CEO of Crédit Agricole Personal Finance & Mobility

    Key figures:

    • In 2023, GAC group was the 4th largest automotive group in China
    • More than 2.5 million vehicles sold in 2023 worldwide
    • 39,90% of electrified vehicles sold in 2023

    Press Contact

    Adeline Tardif
    presse@ca-cf.fr
    +33 (0)1 87 38 02 88 / +33 (0)6 20 18 84 92

    About Crédit Agricole Personal Finance & Mobility

    Crédit Agricole Personal Finance & Mobility is a leader in personal financing and a provider of access to all mobility solutions in Europe. It distributes directly, at the point of sale or on its partners’ e-commerce platforms, a wide range of financing solutions – amortizable credit, revolving credit, leasing and credit buyback – with associated services including insurance, split payment solutions and services dedicated to mobility, with the aim of meeting the challenges of energy transition in mobility, housing and consumption. Its financing solutions and services are offered in France via Sofinco, in Italy via Agos, in Germany via Creditplus, in Portugal via Credibom, in Spain via Sofinco Espana, in Morocco via Wafasalaf, and in China via GAC-Sofinco (automotive financing only). Crédit Agricole Personal Finance & Mobility aims to be the leader in electric mobility in Europe and offers a mobility continuum in the 22 countries where it is present (leasing, medium and short-term rental, subscription, car sharing, installation of charging stations, etc.). The company relies on Leasys, a joint venture equally owned by Stellantis, CA Auto Bank and Drivalia, the pan-European leader in automotive financing, rental and mobility, Crédit Agricole Mobility Services, a comprehensive service offering dedicated to mobility and the development of automotive financing in its universal subsidiaries in Europe and in Crédit Agricole Regional Banks and at LCL via Agilauto. CA Personal Finance & Mobility acts every day in the interest of its 17.2 million customers and society. As of December 31, 2023, CA Personal Finance & Mobility managed €113 billion in outstanding credit. More information: www.ca-personalfinancemobility.com

    Attachment

    The MIL Network –

  • MIL-OSI Economics: IMF Executive Board Concludes 2024 Article IV Consultation with Cambodia

    Source: International Monetary Fund

    January 27, 2025

    Washington, DC: The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation[1] with Cambodia.

    Cambodia’s economy has continued to recover, albeit at a modest pace. We project real GDP to grow from 5.5 percent in 2024 to 5.8 percent in 2025 and inflation to pick up from 0.5 percent in 2024 to 2 percent in 2025 and remain contained. However, risks to the outlook are tilted to the downside from both external factors and domestic vulnerabilities, including from policy changes by major trading partners, geoeconomic fragmentation, and continued weakness in the construction and real estate sectors.

    The recovery remains uneven. Real GDP growth is driven mainly by external demand, with a strong rebound in garment exports and high growth in agricultural exports. Tourism has experienced a structural shift in its composition, resulting in a lagged recovery in tourism receipts. Growth in non-tradable sectors remains weak. After a sustained credit expansion that lifted the credit-to-GDP ratio from 24 percent in 2010 to 135 percent in 2023, credit growth has come to a near halt. The construction and real estate sectors are undergoing a correction, with rising non-performing loans and emerging signs of private-sector debt overhang.

    We project the fiscal deficit at 2.4 percent of GDP in 2025, down from 3 percent in 2024, with a gradual fiscal consolidation envisaged in the medium-term fiscal framework. Public debt remains well-contained, staying below 30 percent of GDP over the next decade. The current account balance is projected to swing back to a deficit of 1.8 percent of GDP in 2024 as strong demand for imports outpaces the recovery in exports and tourism. The deficit is projected to increase somewhat in 2025, reaching 2.5 percent of GDP, with export growth expected to moderate. 

    Executive Board Assessment2

    Executive Directors welcomed the continuing recovery of the Cambodian economy, driven by strong growth in garment and agricultural exports, and improving tourism activity. Nonetheless, the recovery has been uneven, and while growth is expected to continue, risks to the outlook are tilted to the downside. Directors underscored the importance of policies to safeguard macro financial stability, ensure a durable and inclusive recovery, and achieve the authorities’ development goals over the medium term.

    Directors supported a neutral fiscal stance in the near term and highlighted the importance of gradual and high-quality consolidation over the medium term underpinned by sound fiscal frameworks to maintain debt sustainability and strengthen economic resilience. They welcomed the recent publication of a medium-term fiscal framework but recommended strengthening it with more conservative and transparent fiscal rules. Directors stressed the need to further mobilize revenues through rationalizing tax exemptions and implementing tax policy reforms, while enhancing spending efficiency and strengthening public investment management, in order to help rebuild fiscal buffers and safeguard priority social and capital spending. Directors welcomed efforts to foster the development of the domestic government bond market as Cambodia’s access to concessional foreign financing will be reduced when it graduates from Least Developed Country status. They also stressed the need for sound management of fiscal risks from state-owned enterprises and public-private partnerships.

    Directors supported the measured pace of monetary policy normalization while maintaining adequate financial system liquidity. They encouraged continuing efforts to modernize the monetary policy framework to enhance policy transmission and support de-dollarization. Noting the ongoing corrections in the construction and real estate sectors, declining FDI inflows, and rising nonperforming loans, Directors encouraged phasing out forbearance measures and developing a comprehensive plan to safeguard financial stability. They recommended strengthening risk-based supervision, improving macroprudential policy, enhancing coordination among financial sector supervisory agencies, and intensifying oversight of the real estate sector.

    Directors highlighted the importance of structural reforms to promote economic diversification and improve competitiveness. They encouraged the authorities’ efforts to enhance human capital, invest in infrastructure, strengthen the business environment, address climate vulnerabilities, and promote renewable energy to attract more diversified FDI. They also underscored the importance of strengthening governance and institutions, improving transparency, enhancing the AML/CFT framework, and addressing data limitations through  capacity development.

    Table 1. Cambodia: Selected Economic Indicators, 2021 – 29 1/

    Per capita GDP (2022, US$): 1,546                   Life expectancy (2019, years): 75.5

    Population (2022, million):    16.7                    Literacy rate (2019, percent):  87.7
     

    2021

    2022

    2023

    2024

    2025

    2026

    2027

    2028

    2029

    Est.

    Proj.

    Output and prices (annual percent change)

    		                  

    GDP at constant prices

    3.1

    5.1

    5.0

    5.5

    5.8

    6.2

    6.0

    6.0

    6.0

    Inflation (end-year)

    3.7

    2.9

    2.7

    1.5

    2.1

    3.2

    3.0

    3.0

    3.0

    (Annual average)

    2.9

    5.3

    2.1

    0.4

    2.1

    3.2

    3.0

    3.0

    3.0
                       

    Saving and investment balance

    (in percent of GDP)

    		                  

    Gross national saving

    0.8

    15.6

    33.6

    30.7

    30.0

    29.2

    29.2

    29.2

    29.3

    Government saving

    0.3

    3.1

    4.1

    5.1

    6.1

    7.1

    8.1

    9.1

    10.1

    Private saving

    0.5

    12.5

    29.5

    25.6

    23.9

    22.1

    21.1

    20.1

    19.2

    Gross fixed investment

    30.4

    34.6

    32.3

    32.5

    32.5

    32.5

    32.5

    32.5

    32.5

    Government investment

    6.6

    5.6

    5.8

    5.2

    4.5

    4.3

    4.2

    3.9

    3.8

    Private investment

    23.8

    29.0

    26.5

    27.4

    28.0

    28.2

    28.4

    28.6

    28.7
                       

    Money and credit (annual percent change, unless otherwise indicated)

    		                  

    Broad money

    16.4

    8.2

    12.5

    8.5

    7.9

    10.5

    11.3

    9.1

    9.0

    Private sector credit

    23.6

    18.5

    3.5

    4.0

    7.0

    10.0

    10.0

    10.0

    10.0

    Velocity of money 2/

    1.1

    1.0

    1.0

    1.0

    1.0

    1.0

    1.0

    1.0

    1.0
                       

    Public finance (in percent of GDP)

    		                  

    Revenue

    15.8

    18.1

    15.9

    14.9

    14.9

    14.9

    15.0

    15.1

    15.2

    Domestic revenue

    14.7

    16.4

    14.7

    13.7

    13.7

    13.8

    14.0

    14.1

    14.4

    Of which: Tax revenue

    13.2

    14.7

    13.0

    12.1

    12.1

    12.2

    12.3

    12.5

    12.7

    Grants

    1.1

    1.7

    1.2

    1.2

    1.1

    1.1

    1.0

    0.9

    0.8

    Expenditure

    21.0

    18.4

    18.7

    17.9

    17.3

    17.1

    17.1

    17.2

    17.1

    Expense

    14.4

    12.8

    12.9

    12.7

    12.8

    12.8

    13.0

    13.3

    13.4

    Net acquisition of nonfinancial assets

    6.6

    5.6

    5.8

    5.2

    4.5

    4.3

    4.2

    3.9

    3.8

    Net lending (+)/borrowing(-)

    -5.2

    -0.3

    -2.8

    -3.0

    -2.4

    -2.2

    -2.1

    -2.1

    -2.0

    Net lending (+)/borrowing(-) excluding grants

    -6.3

    -2.0

    -4.0

    -4.2

    -3.6

    -3.3

    -3.2

    -3.0

    -2.8

    Net acquisition of financial assets

    -3.6

    1.4

    -0.3

    -0.2

    0.5

    0.3

    0.2

    0.3

    0.4

    Net incurrence of liabilities 3/

    1.6

    1.7

    2.5

    2.8

    2.9

    2.5

    2.4

    2.4

    2.4

    Total public debt (In percent of GDP)

    25.9

    25.0

    25.7

    26.8

    27.8

    27.8

    27.8

    27.7

    27.7

    Balance of payments (in millions of dollars, unless otherwise indicated)

    		                  

    Exports, f.o.b.

    19,527

    23,175

    23,569

    26,745

    28,595

    30,942

    33,449

    36,307

    39,457

       (Annual percent change)

    5.7

    18.7

    1.7

    13.5

    6.9

    8.2

    8.1

    8.5

    8.7

    Imports, f.o.b.

    -30,726

    -31,995

    -26,553

    -31,055

    -33,244

    -35,626

    -38,605

    -41,871

    -45,434

       (Annual percent change)

    46.4

    4.1

    -17.0

    17.0

    7.0

    7.2

    8.4

    8.5

    8.5

    Current account (including official transfers)

    -10,886

    -7,572

    555

    -847

    -1,269

    -1,794

    -1,993

    -2,175

    -2,283

        (In percent of GDP)

    -29.6

    -19.0

    1.3

    -1.8

    -2.5

    -3.3

    -3.3

    -3.4

    -3.2

    Gross official reserves 4/

    20,265

    17,805

    19,998

    20,753

    23,064

    26,887

    30,951

    35,422

    40,351

        (In months of prospective imports)

    7.0

    7.3

    6.9

    6.6

    6.9

    7.4

    7.9

    8.3

    8.7
                       

    Total public debt (in millions of dollars)

    9,505

    9,971

    11,187

    12,473

    13,932

    15,218

    16,508

    17,912

    19,453

    (In percent of GDP)

    25.9

    25.0

    25.7

    26.8

    27.8

    27.8

    27.8

    27.7

    27.7

    External debt (in millions of dollars, unless                                    otherwise indicated)

    		                  

    Public external debt

    9,505

    9,971

    11,187

    12,387

    13,726

    14,939

    16,178

    17,548

    18,978

    (In percent of GDP)

    25.9

    25.0

    25.7

    26.6

    27.4

    27.3

    27.2

    27.1

    27.0

    Public debt service

    397

    427

    449

    418

    439

    458

    482

    506

    533

    (In percent of exports of goods and services)

    2.0

    1.7

    1.6

    1.3

    1.3

    1.2

    1.2

    1.2

    1.1

    Nominal effective exchange rate (index, trade partners by CPI)

    113.3

    122.4

    123.3

    …

    …

    …

    …

    …

    …

    Real effective exchange rate

    (index, based on CPI)

    125.3

    134.0

    132.4

    …

    …

    …

    …

    …

    …

    Memorandum items:

    		                  

    Nominal GDP (in billions of Riels)

    150,793

    164,059

    177,719

    190,603

    205,946

    225,291

    245,726

    267,845

    292,066

    (In millions of U.S. dollars)

    36,797

    39,838

    43,304

    46,568

    50,180

    54,745

    59,548

    64,733

    70,395

    Sources: Cambodian authorities; and IMF staff estimates and projections.

    1/ Based on the rebased GDP.

    		                

    2/ Ratio of nominal GDP to the average stock of broad money.

    		                

    3/ Includes statistical discrepancy.

    		                

    4/ Includes unrestricted foreign currency deposits held at the National Bank of Cambodia.

    		                

    [1] Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board.

    [2] At the conclusion of the discussion, the Managing Director, as Chair of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities. An explanation of any qualifiers used in summing up can be found here: http://www.IMF.org/external/np/sec/misc/qualifiers.htm.  

    IMF Communications Department
    MEDIA RELATIONS

    PRESS OFFICER: Alexander Muller

    Phone: +1 202 623-7100Email: MEDIA@IMF.org

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